Bad Small Business Commercial Lease Review
Commercial Lease Review with Craig Melby
Bad small business commercial lease review with the late Craig Melby and Henry Lopez. Craig reviews a real example of one of Henry’s failed business locations, and what may have been negotiated more favorably in the commercial lease for the business shopping center space. This was Craig’s second appearance on the podcast on the topic of leasing commercial space for a small business – his first appearance was on episode 43.
It is with great sadness that we share the news of of Craig Melby’s passing on April 30, 2019. Craig was a man of great integrity, and a wonderful business associate, and he will be missed by many. You can find his obituary here.
Craig was an entrepreneur and negotiated commercial real estate leases and purchases since 1980 until just before his death in 2019. He founded LeaseSmart after hearing from too many non-clients who contacted him after they negotiated their deal-terms, then asked him to look over the lease before signing it. Always, things could have been done much better. Many times important things. So finally, after experiencing the same need again and again, he formed LeaseSmart to assist those small business people in need. He was also the host of the LeaseSmart Commercial Real Estate Podcast and the author of “Site Rite: Practical ways to boost profits with the right site and best terms!”
Craig held real estate licenses in Florida, North Carolina and South Carolina. He was a Certified Commercial Investment Member (CCIM), and a former member of the Society of Office and Industrial Realtors (SIOR). Craig’s specialties included Site Selection, Lease Negotiations and Facility Acquisitions.
Commercial Lease Review with Craig Melby:
- Craig chats with Henry to review the lease and site location mistakes Henry made with a failed business location. Craig shares valuable tips on what to look for in a site, and what can possibly be negotiated into a commercial lease for a small business.
- NOTE: Craig Melby and Henry Lopez are not attorneys, and we strongly suggest you consult with an attorney before signing any lease agreement.
- Some of the issues we identified with this business location included: poor visibility, our location was in a “dead spot” in the shopping center, limited visibility to our signage, no visibility from the street, and very low pedestrian traffic.
- We did use a commercial real estate agent to help us select this space. We recommend that you use a commercial real estate broker to help you find and negotiate the lease for your small business.
- One approach should have been to contact the landlord early in the process, once we knew the business was not performing as projected, which may have led to negotiating rent abatement or deferment, or perhaps they landlord may have found another tenant to take over the space.
- It is possible to negotiate a lease without a personal guarantee, or negotiate a limited personal guarantee.
- Don’t wait until your lease has almost expired to begin negotiating an extension. If you wait too long, then you lose the advantage of positioning that you may move to another location.
- It’s imperative that you get your own tenant representation, and don’t just negotiate through a commercial lease through the broker who represents the landlord. It’s also critical that you have your attorney review the lease agreement before you sign it.
Books mentioned in this episode:
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- 5 Vital Lease Clauses – Five Uncommon Clauses You Need In Your Office or Commercial Lease
You can find all episodes of The How of Business podcast, the best podcast for small business owners and entrepreneurs, on our Archives page.