Commercial Retail Lease Agreement

A commercial retail lease agreement is a legally binding document between a landlord and a business tenant where the property is used for retail purposes. It addresses the specific needs of the business and the operational aspect of the property.

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Last updated January 2nd, 2025

A commercial retail lease agreement is a legally binding document between a landlord and a business tenant where the property is used for retail purposes. It addresses the specific needs of the business and the operational aspect of the property.

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Retail Space Stats (2023)

  • AVG Property Size: 3,200 SF[1]
  • AVG $/SF: $24.69 SF[2]
  • AVG Rent Increase: 3% year-over-year[3]
  • AVG Term: 3-5 years[4]
  • Vacancy Rate: 4.1%[5]
  • Q4 Vacancy Rate: 2.5%[6]

Key Things to Know About Commercial Retail Lease Agreements

  • Lease Term: Can either be short-term (1 year) or long-term (5-10 years, for example).
  • Payment: Rent can be a fixed rate or a percentage of sales. Operating expenses such as property tax and insurance may included.
  • Property Use: Clearly define what the rental property will be used for to ensure zoning compliance
  • Maintenance and Improvements: Landlord and tenant responsibility for repairs and modifications should be defined in the rental contract.
  • Signage: Clearly outline rules for advertising

Special Considerations 

  • Exclusivity: Protection from competitors leasing space in same property.
  • Co-tenancy: If anchor stores or other key tenants leave shared property, this allows the renter to renogiate or terminate their lease agreement.
  • Accessibility: Ensure property complies with Americans with Disabilities Act (ADA).

Top Retail Rental Rates By Region

The average monthly asking rate for shopping center spaces as of early 2024.[7]

    1. West: $29 SF
    2. Northeast: $23 SF
    3. South: $22 SF
    4. Midwest: $17 SF

Sample

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