As leading business attorneys in Seattle, we’ve helped countless clients navigate the complexities of their legal contracts, including commercial leases. Before you put pen to paper, make sure you understand the implications. Connect with us online to learn more.

In a highly competitive and expensive market like Seattle, signing a lease is a big commitment. This is especially true for commercial leases, which typically involve longer lease terms and larger financial commitments than residential leases.

In many cases, commercial real estate tenants in Seattle rely on their businesses being able to hit certain benchmarks in order to continue affording the lease. If their businesses underperform or fold, they may be unable to maintain payments—which could result in massive financial, personal, and social repercussions.

These are just a few of the many reasons why lessees should consider working with an experienced business attorney to outline, analyze, and review their operational needs before signing a lease. In this article, we provide our 10 tips for navigating commercial leases in Seattle with confidence.

Need expert legal advice for your Seattle business? Don’t wait until your company is struggling to reach out for the help you need. By Design Law is here to review your situation and create a top-tier, custom-tailored strategy that fits your business goals and needs.

Understanding Commercial Leases in Seattle

In Seattle’s competitive and dynamic real estate market, finding a commercial property that meets all of your needs and preferences can feel like a miracle. It’s understandable to want to jump at the opportunity and secure the property before someone else does, but failing to do due diligence has a price.

Commercial lease agreements are complex and legally binding. They may include additional expenses, complicated rent structure, and buried clauses pertaining to use, maintenance, and alterations. They may also incorporate environmental provisions related to local sustainability and compliance laws.

In Seattle’s competitive business environment, understanding how the components of your lease impact your business is crucial to sustained growth. It’s essential that the commercial space you choose supports your operational needs and sets you up for long-term success.

1. Assess whether the property meets your operational needs.

It may look stunning and sit in a prime location, but if a property doesn’t meet your operational needs, it’s not for you. Before signing a commercial lease, you need to ensure the space aligns with your overall business strategy and is capable of supporting your growth. In addition to appearance and location, consider factors such as the size and flexibility of its layout, accessibility, technology needs, operational support and amenities, employee commute, security, etc. Make sure it can accommodate your specific needs, whether those involve high-speed internet, a loading dock, or parking lots.

2. Review pertinent zoning regulations.

If Seattle has specific zoning laws that apply to your business activities, it’s your responsibility to know them and ensure compliance. Confirm that you can obtain the necessary permits or licenses before you sign the lease—doing so can save you from making a time-consuming, costly and embarrassing mistake.



3. Don’t accept the first offer—negotiate terms.

Commercial leases are negotiable, even in fast-paced, competitive markets. There’s no good reason to accept the first offer without at least trying to negotiate terms such as rent, lease duration, renewal options, tenant improvements, amenities, etc. It makes sense to negotiate terms, and your landlord knows that. As long as you approach the conversation with respect, openness, and—preferably—with advice from a legal expert, any term is negotiable.

4. Clarify rent and additional costs.

In addition to your base rent, you need to clarify costs such as maintenance, utilities, and insurance. Failing to pinpoint these additional expenses can throw off your entire budget and leave you working back from a deficit each quarter. Understand how these costs are calculated, whether there are any caps to be aware of, and other pertinent cost-related information.

5. Request a tenant improvement allowance.

If the commercial space you’re considering requires modifications in order to meet your needs, you may need to secure a tenant improvement allowance before signing the lease with confidence. If granted, this allowance can help offset the cost of fitting out or improving the rental space to better fit your operational needs.

6. Consider the lease period and renewal options.

Before signing a commercial lease, it’s critical to consider performance-related contingencies. For example, will you be able to maintain the lease terms if your company underperforms for the next year? If your business is profitable but you are unable to renew your lease, how will it affect your growth? How will a relocation affect business continuity? These are just a few of the questions you need to answer before agreeing to the lease period.

7. Review the sublease and assignment clauses. 

If you are unable to maintain your lease, subleasing it to another tenant can help mitigate your financial losses and keep you on good terms with your landlord. Make sure you understand the sublease and assignment clauses of your rental agreement, and try to negotiate more favorable terms if the current ones are restrictive.

8. Understand the maintenance and repair obligations. 

It’s critical to delineate maintenance and repair responsibilities before you require these services. Make sure to consider responsibilities involving HVAC systems, plumbing, exterior structural repairs, interior repairs, and maintaining compliance with safety codes. Clearly define what constitutes normal wear and tear and try to negotiate caps on certain types of expenses. 

9. Know the termination clauses and penalties.

Although you hope for the best, you need to be prepared for the worst. Knowing the termination clauses and penalties can give you peace of mind and help you strategize about how to handle a potential lease termination. Planning an exit strategy in case your business needs change is a crucial aspect of doing due diligence.

10. Seek legal advice from a Seattle business lawyer.

Navigating any lease agreement is difficult without legal assistance, let alone an expensive commercial lease in Seattle. Working with an experienced business lawyer can help maximize your leverage and arrive at the most advantageous terms possible. Fortunately, you don’t need to look too far for expert legal advice—By Design Law is here for all of your business-related needs. Connect with us online to get started.