Commercial Lease Due Diligence, in the Order It Matters

Commercial lease diligence should connect the numbers, the premises, the permitted use, and the remedies. Start by confirming base rent, escalations, free rent, deposits, CAM, taxes, utilities, percentage rent, and what is estimated versus reconciled.

Physical, Zoning, and Use Review

Inspect the premises and building systems. Confirm square footage, condition, access, parking, signage, loading, ADA concerns, environmental information, certificates of occupancy, permitted use, and required licenses. A permitted use in the lease may still require landlord consent or governmental approval.

Transfer, Renewal, and Risk Allocation

Review assignment and subletting standards, renewal options, notice windows, relocation rights, exclusivity, insurance, indemnity, casualty, condemnation, default notices, cure periods, and remedies. Collect the lease, every amendment, guaranty, estoppel, side letter, reconciliation, notice, plan, and service contract.

Worth knowing: a lease abstract is a navigation aid, not a replacement for the signed lease and amendments. Calendar renewal and notice deadlines when the lease is signed.

Use the AI lease analyzer, prepare negotiation priorities with commercial lease negotiation prep, and review NNN and CAM charges.