A Guide to Leasing Commercial Real Estate in New Jersey: Key Considerations

by real on September 18, 2024

If you plan on leasing commercial real estate in New Jersey, you have certainly landed in the right place; in this guide, we will discuss in detail the different things you need to consider before you sign any lease agreement. 

It doesn’t matter whether you are a business owner who wants to expand your current business or an investor who wants to buy commercial properties in New Jersey; it is important to consider all factors that would help you manage the leasing process more professionally.

So, without any delay, let us dig into the details so that you can make a smart purchase decision. 

Understand the Types of Commercial Leases

First things first, before you explore commercial property listings in New Jersey via Commerfi.com, it is important that you understand the different types of leasing options available. Commercial leases are very different from residential leases, so you must know about the common types and their details before making an investment plan. Here are some of the common types:

• Gross Lease: This is the type of lease in which a tenant pays a lump sum for rent. The landlord would cover major expenses, including property taxes, insurance, and maintenance. This type of commercial property lease is simpler but would require a higher base rent (initial investment).
• Net Lease: Net lease requires the tenant to pay not just the rent amount but also all added expenses, including property tax, insurance, and any operating expenses. There are three variations of net leases: single-net, double-net, and triple-net leases. In a triple-net lease, the tenant holds the highest financial responsibility.
• Percentage Lease: This is the most common type of lease in the retail property sector. This type of lease requires an investor/buyer to pay base rent plus a percentage of their revenue. This type of lease is quite beneficial for sellers. 
• Modified Gross Lease: This is a mix-up of gross and net leases. In this type of lease, the buyer and the seller agree on the cost each party would cover. This is a more flexible lease type and benefits both parties.

You need to understand which type of lease is most beneficial for your business before you finalize an investment. 

Evaluate the Location of the Property 

Location is probably one of the most important factors, especially if you want to invest in commercial real estate in New Jersey. The important thing about NJ is that it is located between New York and Philadelphia, two of the most popular metros in the United States. 

When you check out commercial property listings on Commerfi.com, it is important to evaluate the locations. You need to consider the following factors before making a purchase decision:

• Availability of Transportation Network: When looking for commercial spaces for sale in New Jersey, it is important to ensure your business is easily accessible to customers, employees, and suppliers. New Jersey is quite famous for its huge transportation network, but it is still important to consider its proximity to transportation hubs.
• Local Demographics: You must also consider the local population to know whether you have customers in that area. 
• Local Competition: Before you buy commercial properties in New Jersey, you must check out the local competition. You need to see if there are any established players in the market and whether your business would have room for growth.
• Zoning Laws: Zoning laws are very strict in New Jersey. These laws dictate how a business can use a property. You need to ensure that the location where you plan on investing is zoned for your intended business purpose. 

Analyze and Understand Lease Terms

Before you sign a lease agreement with a selling party, you must access its terms and conditions in detail. You must ensure that the lease terms are negotiated so that you can benefit from them in the long run. Some important terms you need to review include:

• Duration of Lease: First, you have to check the duration of the lease. Commercial leases are longer than residential leases. The average duration of a commercial lease ranges from three to ten years. You must ensure that the allotted lease time aligns with your business goals. A long-term lease would offer more stability for a commercial business. 
• Rent Increase: You would see many commercial leases, including an escalation clause. This refers to an increase in the lease rent at specific intervals. The rate of increase might be on a fixed percentage based on CPIs.
• Renewal Options: You must always negotiate renewal terms before signing the lease. 
• Subleasing: If your business outgrows the space or encounters financial difficulties, having the option to sublease can be helpful. You should try to include subleasing terms in the contract.

Hire Professional Help in New Jersey

Understanding commercial real estate in New Jersey leases can be difficult and requires legal understanding. Commerfi.com suggests hiring professional help even if you are tempted to handle all the negotiations independently. You can contact real estate brokers, attorneys,  or property advisors. Getting advice from these parties can help you save a lot of your time and money in the long run. 

Commerfi.com is the best Commercial Property Listings Platform, you can find contacts of highly experienced real estate brokers who are familiar with New Jersey’s commercial space and can negotiate favorable terms for you. They can advise you on market trends and areas where investment can get you the best returns.

End Words

If you are exploring commercial property listings related to New Jersey and want to make a smart investment via lease, it is important to read about the important factors to consider. 

Before signing a lease agreement for commercial real estate in New Jersey, you must check out the location, competition, transportation network, zoning laws, and even legal obligations that you have to hold on your part.

In this guide, we have discussed in detail the key considerations you need to consider before you look for commercial spaces for sale in New Jersey. Note that Commerfi.com is one the best commercial property listings platforms from which you can explore lucrative properties and get in touch with brokers who can help you.