Top Mistakes Businesses Make When Leasing Commercial Property — And How to Avoid Them
- gloryanng8
- 55 minutes ago
- 3 min read
Signing a commercial lease is one of the most important financial commitments a business makes. Yet many business owners approach the leasing process with limited knowledge, leading to costly mistakes, legal issues, and long-term operational challenges. With rising commercial rents and increased complexity in the 2025–2026 real estate market, avoiding these mistakes is more essential than ever.
This guide uncovers the top leasing mistakes business owners make—and exactly how to avoid them to protect your business and long-term profitability.
Mistake 1 — Focusing Only on Base Rent
The biggest misconception business owners have is that rent is the only major cost.
Hidden expenses may include:
CAM (Common Area Maintenance) fees
Insurance premiums
Property taxes
Utilities
Parking fees
Maintenance responsibilities
Janitorial services
Security fees
Learn how hidden costs impact total occupancy:
Mistake 2 — Not Understanding Lease Types (Gross vs. NNN)
Many businesses unknowingly agree to lease structures that don’t match their budget or risk tolerance.
✔ Gross Lease: Predictable monthly cost
✔ NNN (Triple Net) Lease: Tenant pays rent + taxes + insurance + CAM fees
✔ Modified Gross: Hybrid cost-sharing model
Each structure dramatically affects your long-term expenses.
Mistake 3 — Choosing the Wrong Location
A cheap location rarely means a good location.
Poor location decisions lead to:
Loss of foot traffic
Employee dissatisfaction
Difficult customer access
Delivery problems
Safety concerns
Learn what top-performing markets look like:
Mistake 4 — Not Checking Zoning Restrictions
Zoning determines whether your business can legally operate at a location.
Issues may include:
Restricted business use
Noise limitations
Parking requirements
Permitting delays
Code compliance problems
Before tour no. 1, always check zoning.
Need help choosing the right space type?👉 How to Choose the Right Commercial Space for Your Business
Mistake 5 — Ignoring the Condition of the Building
Many tenants sign leases assuming the building is in good condition, only to find out later that:
HVAC systems are outdated
Plumbing has issues
Electrical capacity is insufficient
The roof needs replacement
Ventilation doesn’t support their operations
Unexpected repairs can cost businesses thousands.
Mistake 6 — Not Negotiating Tenant Improvements (TIs)
Landlords are often willing to pay for or contribute toward improvements such as:
Lighting upgrades
Flooring
Partition walls
ADA compliance updates
Electrical or plumbing work
Never assume the first offer is final.
Mistake 7 — Misjudging Space Needs
Many businesses lease space that is:
❌ Too large (wasted rent)
❌ Too small (limits growth)
❌ Poorly configured (hurts workflow)
Optimize your layout strategically:
Mistake 8 — Not Reviewing Lease Clauses Carefully
Commercial leases commonly include legally binding terms such as:
Rent escalations
Personal guarantees
CAM reconciliation rules
Renewal terms
Subleasing restrictions
Early termination penalties
Maintenance responsibilities
Overlooking these clauses can create serious financial risk.
Mistake 9 — Not Understanding Market Conditions
Business owners often enter negotiations blind to:
Local vacancy rates
Market rent averages
Economic trends
Demand for certain building types
Timing advantages
Mistake 10 — Not Working With a Commercial Real Estate Professional
A commercial broker:
Identifies the best locations
Uncovers hidden costs
Negotiates better lease terms
Protects you from legal risk
Ensures compliance
Saves time and money
CRE mistakes are expensive. Expertise prevents them.
Learn more about CRE services:
FAQs
1. What is the most common mistake businesses make when leasing property?
Focusing only on base rent instead of total occupancy cost.
2. Are NNN leases more expensive?
Not always—NNN leases offer transparency but include additional expenses.
3. How can I avoid choosing the wrong location?
Analyze customer access, parking, safety, and local market trends.
4. Why are lease terms so important?
They determine your rights, costs, responsibilities, and future flexibility.
5. Can I negotiate tenant improvements with the landlord?
Yes — many landlords offer TI allowances.
6. How much space should I lease?
It depends on your staffing, workflow, and equipment.
7. Do I need a broker to lease commercial property?
Yes — brokers prevent costly mistakes and improve negotiating leverage.
Avoid Costly Leasing Mistakes —
Let DNG Commercial Guide You
Choosing the right space doesn’t have to be overwhelming. Our experts help you navigate every step, from site selection to lease negotiation.
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