If you own commercial property, you will have noticed that lease lengths are getting shorter. Tenants are reluctant to sign new leases for terms longer than 5 years as they don’t know if their businesses will survive that long!
This is horrific for landlords who face having a vacant shop or office or industrial unit in 5 years time when they will have to start all over again in finding a new tenant. Furthermore, short leases decrease the value of commercial property and give banks even more reason not to lend.
When I started in this business in the late 1980’s, tenants were signing leases for terms of 25 years. After the recession in the early 1990’s, this dropped to 15 years and at the turn of the century, 10 years became the norm. I dread to think how long leases will be when my 2 year old son becomes a teenager!
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