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Landlord & Tenant “Re-Leasing Costs.”

A main issue affecting both the landlord and tenant in the commercial property sector is the issue of “Re-Leasing Costs”. From the landlord`s point of view, this includes the vacancy period and possible costs to undertake between the period of a lease termination up until a new tenancy agreement is signed with a new tenant. From the tenant`s perspective, this includes re-location costs of moving which affects both business operations and actual costs of moving. “Long-Term Leases” can help avoid these issues although rent expectations need to be considered in long-term agreements, both from the landlord`s and tenant`s side. Tenants will usually try to persuade the landlord of low absorption in the market, high availability of similar space and future security of rental payment (i.e. risk to the owner). Landlords will try to persuade tenants of high absorption, minimal supply of similar space and increase in rents and costs to move a business. In any case, both Landlords and Tenants need to consider various factors before entering into a long-term lease.