Commercial Lease Basics Every Small Business Owner Should Know

Leasing your first commercial space is exciting. It’s also one of the biggest decisions a small business owner will make.

Unlike renting an apartment, commercial leases involve longer terms, more details, and greater responsibilities. In Central PA, options range from downtown storefronts to suburban office suites and flex spaces.

This guide covers commercial lease basics to help you feel confident before signing. Brad, our commercial real estate go-to, helps local businesses every step of the way.

What Is a Commercial Lease?

A commercial lease is a legal contract between a landlord and a business tenant.

It allows the tenant to occupy space for business purposes, usually for several years. Commercial leases differ from residential leases in length, complexity, and obligations.

Understanding the basics before signing helps you avoid costly mistakes later.

Types of Commercial Leases

Not all commercial leases are the same. Knowing the types will help you compare offers.

• Gross Lease (Full-Service Lease) – You pay one set rent. The landlord covers most expenses like taxes, insurance, and maintenance.

• Net Lease – You pay base rent plus some expenses. These may include taxes, insurance, or maintenance costs.

• Modified Gross Lease – This is a blend. Some costs are included in rent, while others are billed separately.

• Percentage Lease – Common in retail. Rent is based on a percentage of sales plus base rent.

Key Terms Every Tenant Should Know

Commercial lease agreements include terms that can be confusing. Here are the most important ones.

• Base Rent: The fixed monthly cost to occupy the space.
• CAM (Common Area Maintenance) Fees: Shared costs like landscaping, snow removal, and hallways that are paid in addition to base rent.
• Build-Out/Improvements: Renovations or upgrades made to suit your business needs.
• Option to Renew: Your right to extend the lease at the end of the term.
• Personal Guarantee: A clause making you personally responsible if the business cannot pay rent.

Understanding these terms puts you in control when reviewing agreements.

👉 “Want a quick reference guide? Download our free Commercial Lease Basics Cheat Sheet here.”

Questions to Ask Before Signing

Before signing, ask your landlord or agent these key questions.

• What is included in the rent?
• Who pays for repairs and maintenance?
• How long is the lease term?
• Are there restrictions on signage or business use?
• Can I sublease if my needs change?

These questions help you avoid surprises and clarify expectations.

Local Insight: Leasing in Central PA

Central PA offers many options for small businesses. Downtown Lebanon has walkable storefronts, while suburban areas feature offices and flex spaces.

Most leases run three to five years, but terms can vary. Seasonal costs, such as snow removal, often appear in CAM fees.

Brad and The Emmily Longenecker Team guide business owners through the process. His experience ensures you understand terms and find the right space.

The Role of a Commercial Real Estate Agent

Working with a commercial agent saves time, money, and frustration. Agents explain terms, negotiate on your behalf, and point out hidden risks.

In Central PA, commercial listings are not always easy to find. Many properties aren’t advertised in one central location. Because of this, having an agent on your side is extremely valuable.

Brad, our team’s commercial expert, knows the local market well. He helps small business owners uncover opportunities, even those that are harder to locate.

With an agent’s guidance, you’ll feel confident knowing you’ve explored all the options and secured the right lease.

Avoiding Common Mistakes

It’s easy to rush into a lease. Here are common mistakes you can avoid.

• Signing without reading the fine print.
• Underestimating extra costs like utilities and CAM fees.
• Skipping professional review of the lease.
• Choosing the wrong location or space size.

Avoiding these mistakes protects your business and ensures long-term success.

📘 Free Download: Get your printable Commercial Lease Basics Cheat Sheet — a simple guide to lease types, terms, and questions.

Leasing a commercial space is a big step, but it doesn’t need to be overwhelming. With the right information, it can be exciting.

Understanding commercial lease basics gives you confidence to make smart choices. Start by learning the types of leases, key terms, and questions to ask.

At Team Longenecker, Brad is ready to guide you through the process. His expertise helps Central PA businesses find spaces that fit their goals.

👉 Looking for opportunities right now? View our current commercial listings here.

📣 Thinking about Leasing in Central PA?

Let Team Longenecker help you prepare, negotiate, and secure the right space.

👉 Contact Us Today and let Brad guide you every step of the way.