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Commercial lease covers it all – right?

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on April 20, 2017.


Jennifer Ivester Berry is a member of the firm’s Transactional Practice Group as an Of Counsel attorney. Jennifer represents individuals, privately-held and public companies in connection with a wide range of commercial real property matters.

By Phillips Murrah Of Counsel Attorney Jennifer Ivester Berry

For those involved in leasing commercial real estate – whether new to leasing or a seasoned industry pro – signing a lease can be a daunting endeavor.

The devil is in the details, and, more often than not, many standard forms omit critical considerations. Accordingly, a close examination of the terms is essential for a quality commercial lease.

Below are five important points to consider when leasing commercial property. These items are not intended to be exhaustive, but rather a starting point for the purposes of evaluation.

• Experience – Knowing the background and temperament of the other party is important. Is leasing commercial property the landlord’s primary business? Will a management company operate the property? Is the tenant established or just starting out? A knowledgeable, cooperative working relationship is imperative for a successful commercial lease.

• Type of lease – Details of what costs are covered and how they are apportioned should be carefully reviewed. For example, leases often described as triple net, meaning that the tenant is responsible for all costs associated with the leased premises other than structural repairs, can actually be a blend of two types of leases, triple net and gross. A gross lease splits the structural repairs and operation expenses between the landlord and tenant.

• Identification of leased premises – Often the outline of the space and delineation of its parameters is an attachment that does not make it into the lease until the end of the negotiations. It is important to verify up front that what is provided meets both parties’ expectations.

• Costs – Payments under a commercial lease can be categorized in several different ways, including rent, common area maintenance, assessments and dues. Awareness that a lower rental rate might be counterbalanced by a monthly fee for maintenance of the property, which is set to automatically increase each year, is essential. The ultimate focus should be on the full monthly cost, regardless of what it is called under the lease.

• Insurance – Insurance coverage requirements will vary based on lease type. It is important to identify two things: what the lease requires and whether such coverage is available, and whether the cost associated therewith is factored into the overall lease costs.

Jennifer Ivester Berry is an attorney at Phillips Murrah who specializes in commercial real estate property and energy-related matters.

Hasenfratz: Commercial real estate development is a team effort

This column was originally published in The Journal Record on August 4, 2016.


Sally A. Hasenfratz is a Director and a member of the Firm’s Real Estate, Tax and Family Wealth and Business Succession Practice Groups.

By Phillips Murrah Director Sally A. Hasenfratz

Commercial real estate development is a complex undertaking and must be managed with precision.

Taking a project from land acquisition to a sale or lease requires time, money and expertise. To ensure the project runs smoothly, accurately and on deadline, a team must come together and function at a high level.

The purpose of this column is to identify key players and examine their responsibilities.

  • Developers. The developer is the team leader with an overarching visionary concept and the ability to control each stage of the project in order to move it to completion. Without developers, there are no projects.
  • Title agents and surveyors. Developers work with title agents to ensure the property is clear of unintended encumbrances and to identify easements and other documents that may be recorded against the property. Surveyors then survey the land and create a graphic representation that shows the location of the project, including the structure’s orientation, access ways, boundaries, easements and related matters.
  • Architects and engineers. Architects and engineers translate developers’ vision into detailed plans by which the project will be constructed. They create the instructions on how to accurately bring the project into physical existence.
  • Builders and contractors. Builders and contractors start the process of construction. Guided by plans created by the architects and engineers, and led by a general contractor who oversees the day-to-day construction site, these team members physically build the project.
  • Regulators. Though not necessarily part of the team, regulators are important components of a project. Select team members work with regulators to make sure the property is zoned for the intended use and all necessary approvals are obtained, including building permits and the like.
  • Lenders. Lenders play a vital role on the team by funding the project. To ensure funds are properly utilized, lenders have a certain degree of oversight in the construction process.
  • Users. Typically, commercial projects are developed for sale or lease to meet the specific needs of users and occupants of the project.
  • Coordinators. Many of the team’s activities overlap or occur in a sequential fashion. Attorneys work with developers to help coordinate the process and make sure that the necessary contracts are in place.