Question! Commercial Lease

General Real Estate Investing
1

Hey, hoping you all can provide some clarity. I am in lease negotiation with a developer for a commercial lease to open my business, the property is a newly renovated historical building, the utilities and bathrooms are not installed yet and this is the language of the negotiation.

Building Specification
The property will be let as shell (as viewed), with the main utilities being brought to the exterior of
the building.

Sounds very much like they are NOT building me a restroom and the main utilities will only be brought to the exterior of the building which makes no sense at all? So in my tenant build out I will be responsible for installing utilities and bathrooms- and this seems uncommon to make a tenant pay for this? Isn’t is standard practice for bathrooms and utilities to be brought to the space I am leasing?

2

Everything’s negotiable. You can’t assume anything. If it’s in writing, it’s binding.

There’s really no rule of thumb regarding tenant improvements, except that the more the landlord does, the longer the lease is gonna be. No landlord will spend $20k on ‘TI’ and then only get a one or two-year lease. Again, we’re back to negotiations.

If you want the landlord to do the finish work, plan on committing to a longer lease agreement. Otherwise, you still need to know what you’re agreeing to. I mean, how much is a utility hookup going to be? Are permits required? Have permits already been pulled? ??