You may not know this about me, but I love hip-hop. It started at an early age, at 5 years old, watching Soul Train on Channel 11. I was introduced to U.T.F.O a few years later and even remember watching breakdancing movies in second and third grade at an assembly. In fact, the first album I bought was Jungle Brothers when I was 12. And in my freshman year of college, I was introduced to the Ready to Die album by Notorious B.I.G, and have continued to play that album constantly over the last 27 years. In honor of Biggie’s birthday, I thought I’d take a page out of his Life After Death album by writing my own version of one of his songs titled, ”The Ten Lease Commandments.”
1. Never let the landlord know if you are staying (renewing) or going (relocating).
2. Time is your friend until it isn’t. Get ahead of any real estate decision for maximum leverage until it offers no leverage.
3. Flexibility isn’t just for Gumby. Work to get cancellation rights, renewal rights, ROFO, and ROFR’s.
4. Burn the cash. Don’t let it sit in someone else’s pockets for longer than it has to. It’s best to keep as much in your business and as little with the landlord.
5. Reset your Base. Real estate taxes add up quickly and a new lease should get you back to zero.
6. It’s Electric: Go for direct metering when it’s available.
7. Say ‘NO’ to the relo. Get that out of your lease when possible so your landlord can’t force a relocation.
8. Eyes wide open on the demo. A demo clause is a nasty word and can upend you and your business.
9. Know your numbers. Base rent is just the starting point, there’s more to look out for.
10. Subleasing can save you a ton of dough. While this might not be exhaustive if you follow these rules, you are sure to be in a much better place than many companies who have signed office leases.