ASK FOR A BETTER LEASE FOR YOUR GYM
On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in commercial real estate on Friday, February 23, 2018.
How much room you have to negotiate your gym lease depends a lot on who has leverage — and how much of it — in the situation.
You’ll obviously have more room to negotiate for what you want if you have great credit or there are a lot of open commercial properties available. However, you won’t get anything if you are too afraid to negotiate. In order to get the best available lease for your gym, below are three important and highly negotiable matters to address.
Your gym can help liven up an otherwise dull retail strip mall. However, there is such a thing as “too much of a good thing.” Negotiate for the right of review and refusal toward competitors in the fitness industry. That’s the only way to keep your landlord — whose primary concern is keeping the available spaces filled and appearances thriving — from renting to a competitor that could steal your clients away.
2. Common area charges
It’s easy to forget about the issues that come up with common tenant areas when you’re focused on a great usable space. However, issues with common areas affect your bottom line. Maintenance charges, in particular, can be costly. Make sure that you negotiate exactly what services your landlord will provide in terms of cleaning, insurance, maintenance and repairs. Take the opportunity to ask for more in terms of what your landlord will provide or less in terms of what you’ll pay toward those services.
3. Insurance demands
You’ll doubtless have to provide your landlord with proof of your insurance — but how much insurance you have to have depends a lot on the terms of the lease. You can ask for a reduced minimum coverage insurance amount. That can significantly help reduce your operating costs.
4. Noise issues
While it may seem counter-intuitive to draw your potential landlord’s attention to a possible issue, the reality is that gyms are usually noisy. People shout instructions, offer loud encouragement to each other, play music for inspiration and clank weights together. The goal in bringing up the issue is to get your landlord’s assurances now about how noise complaints from other tenants will be handled.
There’s a lot to address in any commercial real estate lease — but good negotiations now can make for a great business relationship later.