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Reading a commercial lease like a CFO
Headline rent is the number everyone negotiates. Operating costs, restoration and assignment clauses are the ones that cost money.
A ten-year office lease is one of the largest commitments most companies make. Yet the negotiation often stops at rent per square foot and the length of the free period.
Three clauses worth more than the rent discount
- Operating-cost pass-throughs, and what is excluded from them
- Restoration obligations at the end of the term
- Assignment and subletting rights if the business changes size
Each of these can move the total cost of occupancy by more than a year of free rent. They are also easier to win early in a negotiation than late.
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