Difference Between A Commercial And Retail Lease In Wayne
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When contemplating whether a lease is retail or commercial, the difference should be quite obvious – a retail lease would include shops and stores, while a commercial lease would be an office. Yet, this distinction is not as apparent as you might think.
Retail spaces are designed to sell products directly to customers. Think of stores where you buy clothes or groceries. Commercial spaces are used for a wider range of business activities, such as office work, manufacturing, product storage, and medical care.
Commercial real estate is used for businesses, while residential real estate is used for living. Compared to residential properties, commercial properties tend to be more stable and liquid because they are easier to sell.
A grocery store is typically considered to be both retail and commercial. It sells directly to consumers (retail) but often operates on a larger scale with bulk purchasing and distribution (commercial).
“Commercial space” generally refers to office space. With commercial space, there may not be as many people wandering in and out, whereas “retail space” depends largely on foot traffic. Commercial space is typically used for businesses that don't have a lot of foot traffic.
Commercial leases are typically fixed-term agreements, often lasting 12 months or more. A commercial rent agreement is usually a short-term arrangement, often renewing every 30 days, offering more flexibility but less long-term security.
As the name suggests, a retail lease applies to those spaces or premises intended exclusively for retail, i.e. selling goods or services. For example, the premises used for a clothing store is leased out on a retail lease.
Gross Lease Gross leases are most common for commercial properties such as offices and retail space. The tenant pays a single, flat amount that includes rent, taxes, utilities, and insurance.
