Direct Lease
A direct lease transaction involves two (2) parties.
Tenant
Landlord
Direct leases are ideal for company’s with an established brand, product/service and financial stability.
Direct leases have a number of advantages to consider when evaluating the right deal structure to pursue.
Positive Factors:
Greatest potential concession package.
Largest market of available options.
Most flexibility in negotiating deal terms.
Direct leases also facilitate the greatest level of control over your space.
Control factors:
The optimal deal structure for tenants seeking to design and build new space.
Ability to secure a long term lease commitment.
Create the closest relationship with building ownership.
When engaging a landlord in a long term direct lease and securing a full concession package there are a few tradeoffs and risks to consider when weighing which deal structure makes the most sense.
Negative factors:
Landlords may require a larger security deposit to account for upfront risk and initial out of pocket expense in providing a full concession package.
Embarking on a project to build a new space can lead to risks in going over budget (beyond the landlords contribution) and unexpected out of pocket expenses.
Entering a long term lease at the peak of a commercial market rent cycle.