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NYC commercial security deposits can be considerable. Ensure you don’t tie up too much capital. Connect with a commercial real estate expert to minimize your security deposit. Call or email us.
When you sign a lease for a commercial space in New York City, paying a security deposit to your landlord once signing the lease is inevitable.
The most important thing to consider is that commercial real estate security deposits work differently than residential.
Commercial landlords have way more leeway regarding the amount of security deposit they will require.
A landlord could demand a security deposit ranging from 2 to 12 months. However, it largely depends on their perceived risk. Established companies like law firms or hedge funds that can document a history of profitability will pay less than startups without a track record.
Commercial real estate landlords will do the following two things to determine your creditworthiness and financial risk.
Consider working with a broker who understands the ins and outs of New York City commercial real estate.
Through their experience negotiating deals, the realtor will know which landlords have a history of requiring less security deposit. They will know which landlords will be open to a partial return of your security deposit (contingent on timely rent payments) during your lease term.
The best ones will leverage negotiation power by considering the following factors:
Refraining from tying up valuable capital in a security deposit is imperative. Moreover, do all you can to avoid wasting time negotiating with a landlord with unreasonable expectations.
Efficiently managing your time and avoiding excessive costs can differentiate your business’s success or failure.
Working with a knowledgeable and experienced commercial real estate broker will not only put you on the right path. It will keep your interests protected by avoiding unreasonable fees.