Difference between Retail Lease and Commercial Lease
Basis |
Retail Lease |
Commercial Lease |
---|---|---|
Suitability |
A retail lease is suitable for properties like shopping centers, malls, or standalone retail buildings. |
A commercial lease is suitable for a variety of properties like office buildings, industrial facilities, warehouses, and mixed-use developments. |
Usage |
The leased property should be used for retail activities only |
The premises can be used for a variety of purposes, such as offices, manufacturing, storage, distribution, etc. |
Lease Terms |
Witness longer lease terms as businesses need time to grow. |
The lease term varies from short-term to long-term depending on the nature of commercial property, market conditions, and tenant requirements |
Rent Structure |
Fixed rent, percentage rent, or a combination of both is common. |
Rent structure depends on types of lease like gross lease, net lease, or modified gross lease is common. |
Operating Expenses |
Operating Expenses are borne by the landlord most often. |
Operating Expenses are passed on to the tenant depending upon the type of net lease opted. |
Focus |
Tenants focus on foot traffic and visibility as it directly affects sales. |
The focus of the tenant is grabbed by the location’s suitability and functionality. |