How can you negotiate lease terms with changing transportation infrastructure in commercial real estate?

1 Assess the impact

Before you sign or renew a lease, you should do some research on the current and planned transportation infrastructure in the area. How will it affect your business operations, customers, employees, and suppliers? Will it increase or decrease your accessibility, visibility, and convenience? Will it create more or less traffic, noise, and pollution? Will it alter the market dynamics and the rental rates? You should also consider the timing, duration, and scope of the projects, and how they might disrupt or benefit your business in the short and long term.

2 Negotiate the rent

One of the most important lease terms to negotiate is the rent. Depending on the impact of the transportation infrastructure, you might want to ask for a lower or higher rent, or a flexible or fixed rent. For example, if the infrastructure will improve your location and increase your revenue potential, you might be willing to pay a higher rent, but you might also want to lock in a fixed rent for a longer term to avoid future increases. On the other hand, if the infrastructure will harm your location and reduce your revenue potential, you might want to ask for a lower rent, or a flexible rent that adjusts to the market conditions or your performance.

3 Negotiate the clauses

Another important aspect of lease negotiation is the clauses that define your rights and obligations as a tenant. You should pay attention to the clauses that relate to the transportation infrastructure, such as maintenance, repairs, improvements, relocation, termination, and force majeure. For example, you might want to negotiate a clause that allows you to reduce your rent or terminate your lease if the infrastructure causes significant damage or inconvenience to your property or business. Or you might want to negotiate a clause that requires the landlord to provide adequate parking, signage, or security for your property or business.

4 Negotiate the incentives

A final tip for lease negotiation is to look for incentives that can offset the impact of the transportation infrastructure. Incentives are benefits or concessions that the landlord offers to the tenant to attract or retain them. Some common incentives are free rent, tenant improvement allowance, rent abatement, option to renew, option to expand, or option to sublease. For example, you might want to ask for free rent during the construction period of the infrastructure, or a tenant improvement allowance to upgrade your property or business to suit the new transportation environment.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?