Robert L. Baker, Jr.
Partner
732-568-8376 rbaker@sh-law.com
Commercial Leasing
In today’s challenging market, partnering with an experienced attorney is critical for everyone involved in a commercial lease transaction. Scarinci Hollenbeck’s commercial leasing attorneys rely on the depth and breadth of their experience to provide sophisticated and comprehensive legal guidance, whether negotiating, drafting, reviewing, or enforcing our clients’ commercial lease interests.
Key Contacts
Commercial Leasing
Overview
Working With an Experienced Commercial Lease Attorney Reduces Risk
Commercial lease transactions are notoriously complex and can lead to significant legal headaches if not handled properly. At Scarinci Hollenbeck, we understand both the “art” and “science” of successful leasing transactions.
Lease terms and documentation must be clear, and the terms must be understood by all parties. Poorly drafted agreements can result in costly and time-consuming disputes. Our years of practice allow us to provide individualized representation that reflects your unique circumstances and legal requirements.
Our attorneys similarly understand that business realities and market conditions are always in flux. We work closely with our clients to respond to challenges and act on new opportunities, whether that means negotiating a lease termination, completing a lease buildout, or structuring a sale-leaseback transaction.
Expansive Commercial Leasing Capabilities
Scarinci Hollenbeck’s commercial leasing team has decades of combined experience in structuring, drafting, and negotiating leases for office, retail, multifamily, industrial, and mixed-use properties throughout the region. We also provide guidance and insight on rights and remedies in connection with lease defaults, modifications, extensions, and terminations.
Our commercial leasing attorneys provide a wide range of services, including:
- Counseling on lease rejections tied to bankruptcy proceedings
- Dealing with noncompliance with lease terms and lease defaults
- Developing and troubleshooting lease forms and lease-related issues
- Drafting subordination, non-disturbance, and attornment agreements
- Handling lease modifications, extensions, assignments, and assumptions
- Navigating complex sale-leaseback transactions
- Negotiating and drafting commercial leases, subleases, estoppel certificates, and subordination and non-disturbance agreements
- Assisting in terminating leases, renewing leases, and exercising lease options
- Resolving landlord-tenant disputes via mediation, arbitration, and litigation
Full-Service Commercial Leasing Representation
Scarinci Hollenbeck is equipped to provide full-service leasing representation to all parties involved in commercial leasing transactions, including commercial developers, real estate entrepreneurs, lenders, financial institutions, insurance companies, and other commercial clients. We understand that the interests of the parties can differ widely and work diligently to negotiate agreements that meet our client’s objectives and protect their legal rights. When necessary, we can call on our peers in Commercial Real Estate Development, Litigation, Bankruptcy, and Tax to devise practical solutions to the most complex issues.
Our commercial lease attorneys also have experience across industries in a wide variety of real property leasing transactions, including:
- Farmland Use Agreements
- Cannabis Leases
- Ground Leases
- Hotel and Other Hospitality Industry Leases
- Industrial and Warehouse Leases
- Office Leases
- Pad Leases
- Retail Leases
- Subleases
FAQ about Commercial Leasing
There are many different types of commercial lease arrangements, each with its advantages and disadvantages. A “gross lease” is where a tenant pays one lump sum for rent, and the landlord pays for any additional expenses, such as taxes, insurance, and maintenance. In a “net lease,” the base rent is generally lower, but the tenant is responsible for most (if not all) other expenses associated with operating the business. A “modified gross lease” is a combination of the two.
In a triple net lease, the tenant is responsible for paying the net of the landlord’s operating expenses, including real estate taxes, property insurance, and maintenance (the three nets), in addition to base rent and other fees. Because the tenant essentially assumes the risk of ownership, it is important to understand how the operating expenses are calculated.
A lease assignment occurs when one party to an existing lease agreement (known as the “assignor”) transfers the contract’s rights and obligations to a third party (known as the “assignee”). In a sublease, the existing tenant assigns some or all of their interest to a third party, known as the “subtenant” (or “sublessee”). The primary difference is that in a sublease the subtenant does not simply replace the original tenant. The original tenant, often referred to as the master or prime tenant, is still the responsible party under the terms of the lease and takes on many of the responsibilities of a landlord in relationship to the subtenant. Under an assignment, the original tenant transfers its entire interest in the premises, and the new tenant has a direct contractual relationship with the landlord. While the original tenant ceases to have any property rights or obligations, it may still be held liable by the landlord if the new tenant fails to abide by the terms of the lease.
Forms can be a good starting point, but they rarely address the unique circumstances of the parties. In addition, if you are not the one who provided the form, it is generally safe to assume that the terms will not be in your favor. Therefore, standard leases should serve as a starting point for lease negotiations and always be reviewed with experienced counsel before signing.
Under a right of first refusal, when the landlord receives an acceptable offer to lease or purchase the property from a third party, the landlord must submit the offer to the tenant, who then has the right to lease or purchase the subject property on the same terms and conditions. Meanwhile, a right of first offer obligates the landlord to notify the tenant that the property is being made available for lease or purchase before marketing the property. The tenant then has the right to lease or purchase the property under that offer. In the case of either provision, care must be taken by the drafter to set forth the conditions that trigger the tenant’s rights, and the steps that the tenant must take to exercise those rights.
Base rent (sometimes referred to as fixed rent) is the price, usually per square foot, that a tenant agrees to pay the landlord for the right to occupy the premises. This is the amount that most people think of as the rental rate.
Additional rent is the sum of all other money that a tenant needs to pay, usually to the landlord, for other expenses in connection with the tenancy. Some items of additional rent may be the tenant’s share of taxes, insurance costs of the landlord, and the tenant’s share of the operating expenses needed to operate and maintain the building.
In a lease, Base Rent and Additional Rent are often collectively referred to simply as Rent.
OUR commitment to excellence, combined with our mission to deliver outstanding client service, has earned our firm a solid reputation.
Scarinci Hollenbeck is a business law firm based in New Jersey, New York, and Washington, D.C servicing clients worldwide.
If you have a legal need that is not mentioned, please contact us to discuss how we may help you.
Contact us today to learn more about how we can assist you.
Practice Area Attorneys
Why Choose Us?
Landlords, tenants, and other commercial parties rely on us to advance their business objectives through successful leasing transactions. Scarinci Hollenbeck’s commercial leasing attorneys have decades of shared experience negotiating all types of lease transactions, ranging from individual office leases to large lease portfolios. With offices in New York City and New Jersey, we are also equipped to represent our clients’ interests across the region.
In addition to negotiating lease transactions, our clients can count on us to respond quickly if a leasing dispute arises. The members of our team are not only talented commercial leasing attorneys but also experienced litigators. In every matter, we work tirelessly to deliver quality representation, personal service, and efficient results.
