Leasing Basics
Courtesy of the Nonprofit Finance Fund

Once you have completed your organization's User Requirements Checklist and have considered the issues raised here, you should have a good idea of the type and amount of space you require, the best locations for your clients and staff, and the maximum amount you can spend for rent and improvements.

Leasing space is one of the most flexible ways to house an organization. However, it is important to understand all the costs and provisions of leasing when making your decisions about whether to stay or move and lease or buy. The true cost of a new lease will not be immediately apparent: commercial leases are meant to be negotiated and there are many variables to consider. Following are answers to some frequently asked questions about negotiating a lease; they are relevant even if you are considering renegotiating your current lease.

As with all things, there are no hardened rules in the commercial leasing business. It is possible that your organization may not confront all of the issues presented here, and it may encounter some not presented here.

This is a long document, as there are many issues discussed. Here is a list of the questions addressed (in order) to help you reference your reading:

Question:

1. What is the non-profit's role?
2. What are the roles of outside consultants?
3. What will the costs be?
4. Will the monthly costs rise over the term of the lease?
5. What if the space needs renovation?
6. What are the other negotiating points?

Sources: David N. Lebenstein, Time Equities, Inc. and Arlene Wysong, Sylvan Lawrence Co.

© 2000 by the NONPROFIT FINANCE FUND

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