Leasing commercial space takes 5 steps: set the asking rent from comparable leases, market the space, qualify the tenant, agree the business terms in a letter of intent, and sign a written lease. In Florida, a lease for a term of more than 1 year must be in writing and signed by the landlord or the landlord's authorized agent (s. 689.01).
Key takeaways
- Five steps take a vacant space to a signed lease: asking rent, marketing, tenant qualification, letter of intent, and lease.
- Qualify the tenant before you negotiate terms, and use the same checklist for every applicant.
- Free rent, a tenant improvement allowance, and landlord work all cost money. Price each one over the full term before you counter.
- A lease for more than 1 year must be in writing and signed (s. 689.01). Your attorney drafts the lease. A letter of intent does not replace it.
The 5 steps
A space leases faster when the work is done in order. Each step produces something the next step needs, and each one has a cost if it is skipped.
| Step | What happens | Have ready | Risk if skipped |
|---|---|---|---|
| 1. Set the asking rent | Position the space against competing space | Comparable leases, expense history, measured square footage, and the condition of the space | A rent set too high leaves the space vacant. A rent set too low leaves money on the table for the whole term |
| 2. Market the space | Reach tenants and the brokers who represent them | Plans, photos, a site plan, permitted uses, parking and signage information, and the expense structure | Inquiries from tenants whose use is not allowed, and tours that go nowhere |
| 3. Qualify the tenant | Test the tenant's ability to pay and to operate | An application, financial statements, tax returns, business history, references, and guarantor details | A tenant who cannot pay the rent |
| 4. Agree the terms | Settle the business terms in a letter of intent before legal fees start | The term sheet below | Terms drift, and surprises show up in the lease draft |
| 5. Sign a written lease | Convert the agreed terms into a binding contract | An attorney-drafted lease, exhibits, insurance certificates, and any guaranty | Disputes over terms that were only discussed |
Asking rent and the expense structure
Commercial rent is commonly quoted per square foot per year, and the number means little until it names which expenses are included. A net lease passes operating costs to the tenant. A gross lease includes them in the rent. Say which one you are offering. The NNN versus gross lease guide compares them.
Set the asking rent from comparable leases, which show what tenants actually pay, rather than from asking rents, which show what other landlords hope to get. Adjust for location, condition, parking, visibility, and how each building measures square footage. Keep your expense history organized, because tenants and their brokers will ask for it. Treat the first number as a hypothesis. The calls and tours you get will tell you whether the market agrees.
Qualifying the tenant
The tenant's ability to pay decides whether the rent you quote gets collected. Decide your criteria before the first application arrives and use the same checklist for every applicant.
- The business: the legal entity, years in operation, other locations, and the use the tenant intends
- The money: financial statements, tax returns, and bank references
- The support: a personal guaranty, a security deposit, or both, when the financials call for them
- The fit: whether the use is allowed at the property and whether it conflicts with another tenant's exclusive
For what the building itself must support, see the checklist for warehouse, flex, office, and retail.
The letter of intent: terms to settle
A letter of intent (LOI) states the business terms before lawyers draft the lease. An LOI usually says it is non-binding apart from named provisions, so read it with your attorney before you sign one.
| Term | What to settle | Landlord's question |
|---|---|---|
| Premises and delivery | Exact space, how it is measured, and its condition on the delivery date | Is the space delivered as-is, with landlord work, or for the tenant to build out? |
| Term and options | Length of the lease and any renewal options | How will the rent for an option period be set? |
| Base rent and escalations | Starting rent and how it increases | Does the schedule keep pace with your costs over the term? |
| Expense structure | NNN, modified gross, or gross, and any caps or exclusions on pass-throughs | Which costs does the tenant pay, and can the tenant audit them? |
| Concessions | Free rent, a tenant improvement allowance, or landlord work | What does each one cost over the full term? |
| Deposit and guaranty | Security deposit and any personal or corporate guaranty | What backs the tenant's obligations if the business struggles? |
| Use and exclusives | Permitted use and any exclusive the tenant wants | Does the use fit the zoning and the other leases? |
| Contingencies | Permits, approvals, or financing that must come through | What is the deadline, and who can end the deal? |
| Parking, signage, and transfers | Parking rights, sign rights, and assignment or subletting | Who controls the sign panels, and what do you approve? |
Concessions: what each one costs
Concessions are how the market closes a gap between the rent a landlord wants and the rent a tenant will pay. Each one has a cost you can price.
- Free rent waives base rent for a period. Ask whether operating expense charges are waived too.
- A tenant improvement allowance is your contribution to the tenant's build-out. Settle what it covers, how it is paid, and what happens if the tenant leaves early.
- Landlord work means you build. Price it, schedule it, and decide who carries the risk of delay.
To compare offers, add the base rent over the full term, subtract the value of the concessions, and divide by the number of years. That gives a net rent per year. Compare offers on that figure, because the headline rent can hide a large concession.
From letter of intent to lease
Florida's statute on leases, s. 689.01, requires a lease for a term of more than 1 year to be in writing and signed by the party creating it, or by that party's lawfully authorized agent. The same section says no subscribing witnesses are required for a lease of real property. Put every lease in writing regardless of its length. Your attorney will tell you what else your lease needs.
Florida's nonresidential tenancy statutes (Chapter 83, Part I, ss. 83.001 to 83.251) cover topics such as unwritten tenancies, holding over after a lease ends, a landlord's lien for rent, and removing a tenant. Ask your attorney how they apply to your lease.
Settle accessibility early. Under the ADA Title III regulations, both the landlord of a building and the tenant who operates a place of public accommodation are covered, and the lease can allocate responsibility between them (28 CFR 36.201(b)). Decide who handles accessibility work before you sign.
Florida repealed the state sales tax on most commercial rent for occupancy periods beginning October 1, 2025. Check that your lease form and your invoices no longer add tax. The repeal guide lists what is still taxable.
Working with a broker
A broker can market the space, screen inquiries, and negotiate terms. Get any agreement with a broker in writing, and read the term, how a fee is earned, what happens if you lease to a tenant you found yourself, and who pays a tenant's broker. Ask how the broker will market the space and how often you will get a report on activity.
If you are deciding whether to lease at all, see sell, hold, lease, or reposition. For the tenant's side of the same lease, see commercial lease terms.
Common questions
Does a commercial lease have to be in writing in Florida?
A lease for a term of more than 1 year must be in writing and signed by the party creating it or that party's authorized agent (s. 689.01). Put every lease in writing, including shorter ones, and have your attorney review it.
Is a letter of intent binding?
It depends on the wording. An LOI usually states that it is non-binding apart from named provisions. Have your attorney read it before you sign.
Do I charge sales tax on commercial rent in Florida?
Not on rent for occupancy periods beginning October 1, 2025 or later. Rent for periods through September 2025 stays taxable, and parking and storage for motor vehicles, boat docking, aircraft tie-down, and transient lodging remain taxable. Confirm your situation with a Florida CPA.
Who is responsible for ADA compliance, the landlord or the tenant?
The ADA Title III regulations cover both the building's landlord and the tenant who operates a place of public accommodation, and the lease can allocate responsibility between them. Settle it in writing before you sign.
Sources
- Section 689.01, Florida Statutes (leases of more than 1 year in writing; no subscribing witnesses required for a lease of real property)
- Chapter 83, Part I, Florida Statutes, Nonresidential Tenancies (ss. 83.001 to 83.251), contents index
- 28 CFR 36.201, Legal Information Institute (ADA Title III: landlord and tenant responsibility may be allocated by lease)
- Florida Department of Revenue, TIP 25A01-04 (July 24, 2025): Sales tax on commercial rentals repealed effective October 1, 2025
Sources retrieved October 24, 2026. Statutes and rules change. Confirm current law with your attorney.
General information, not legal, tax, accounting, or investment advice. This is general information, not legal advice. Your attorney drafts and reviews the lease and any letter of intent. Examples marked illustrative use hypothetical numbers.