How Do You Lease Commercial Space? (Step-by-Step, No Fluff)

Leasing commercial space looks simple from the outside.

Find a space. Agree on rent. Sign.

Then the lease shows up, and it’s 40 pages long. The rent you saw on the listing isn’t the rent you’ll pay. And the landlord wants a personal guarantee.

None of that is hard once you know the order things happen in. Here’s the whole process, start to finish.

The Short Answer

To lease commercial space, you:

• Figure out what you need.
• Set an all-in budget, not just a rent number.
• Get your documents ready.
• Search, tour, and compare.
• Send a proposal or letter of intent.
• Negotiate the lease.
• Sign, build out, and move in.

Seven steps. Let’s walk through them.

What Do You Need Before You Start Looking?

Step 1: Know what you’re looking for.

Write down four things before you open a single listing:

• Size: how many square feet you need now, and in two to three years
• Location: where your customers, staff, or trucks need to be
• Use: office, retail, industrial, medical, restaurant
• Timing: when you need to be open

Timing catches people. A space that needs a build-out can take months before you can operate in it. Start earlier than feels necessary.

Step 2: Set an all-in budget.

Commercial rent is usually quoted per square foot, per year. That number is often just base rent.

On a triple net (NNN) lease, you also pay your share of property taxes, insurance, and maintenance. Those charges sit on top of base rent.

Step 3: Get your documents ready.

Landlords check you out the way a lender would. Expect to provide:

• Business financials or tax returns
• A business plan, if you’re a newer company
• Personal financials, if the landlord asks for a personal guarantee

Have these ready and you’ll move faster than the tenant who doesn’t.

How Do You Find the Right Space?

Step 4: Search, tour, and compare.

Start with listings in your target area. Filter by property type and size. Then tour your top three to five.

On each tour, ask:

• What’s the total cost per square foot, including NNN charges?
• Is the quoted size usable or rentable square feet?
• What condition is the space in, and who pays to fix it up?
• How long has it been available?

Many tenants also hire a tenant rep broker. In most deals, the landlord pays that commission, not you. 

What Does the Rent Actually Cost?

Here’s the math on an illustrative deal. A physical therapy practice is looking at 2,500 sq ft of retail space.

• Base rent: $26 per sq ft per year
• NNN charges: $9 per sq ft per year
• Base rent alone: 2,500 × $26 = $65,000 a year
• NNN charges: 2,500 × $9 = $22,500 a year
• All-in cost: $87,500 a year, or about $7,290 a month

Budget off the $87,500, not the $65,000. That $22,500 gap is where tenants get surprised.

How Do You Go From Offer to Signed Lease?

Step 5: Send a proposal or letter of intent.

Before anyone drafts a lease, you agree on the big terms in a short, usually non-binding document. It covers rent, term length, start date, build-out money, and any free rent.

Step 6: Negotiate the lease.

The asking rent is an opening number. CBRE’s Q3 2026 office report puts the spread between asking and taking rents at 9.9%, wider than the 8.6% spread in 2019. In other words, the rent on the listing and the rent tenants actually sign often aren’t the same.

Rent isn’t the only lever. Tenants also negotiate:

• A tenant improvement allowance toward build-out
• Free rent while the space is being built out
• Annual rent increases
• The size of any personal guarantee
• Options to renew or exit early

Have a real estate attorney read the lease before you sign. It’s a small cost against a multi-year commitment.

What Happens After You Sign?

Step 7: Build out and move in.

You’ll typically pay a security deposit and first month’s rent at signing. Then the build-out starts, if the space needs one. Get permits, contractor schedules, and utility transfers lined up early.

Recap

• Know your size, location, use, and timing first.
• Budget off the all-in cost, not base rent.
• Have financials ready before you tour.
• Treat asking rent as a starting point.
• Get an attorney to review the lease.

Final Word

Leasing isn’t complicated. It’s just a long list of things that are easy to skip.

The tenants who get the best deals aren’t the ones who negotiate hardest. They’re the ones who did steps one through three before they ever walked into a space.

Browse commercial space for lease at hutfin.com.