Commercial property decisions are some of the most important choices a business owner in Washington can make. Signing a lease, buying a building, or handling a dispute may seem like separate issues, but they all carry long-term consequences that can shape your company’s stability and growth.

A lease creates financial obligations that last for years. A purchase requires careful review of zoning laws, title records, and potential environmental issues. And when a dispute arises (whether with a landlord, a buyer, or a neighboring property owner) it can disrupt operations and lead to costly litigation.

This guide is built to help you make informed decisions before you sign a contract, invest in a property, or respond to a conflict. If you’re already in the middle of one of these situations, or unsure about your options, our team is available to help. Call us at (206) 621-1110 for a direct and confidential conversation.

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The Commercial Lease: A Practical Guide for Washington Businesses

Many business owners understandably focus on the monthly rent and the length of the term, but the fine print contains dozens of other clauses that dramatically affect your company’s flexibility and financial health.

What Are the Most Important Clauses to Review in a Commercial Lease?

• Use Clause: This clause defines exactly how you are permitted to use the property. A narrow clause might restrict you to “the sale of coffee and baked goods,” while a broader one might allow for “a cafe and general retail.” A broader use clause is almost always better, as it gives your business room to evolve without having to ask the landlord for permission.
• Term and Renewals: This section specifies the length of the lease. While a longer term provides stability, a shorter term offers more flexibility. Pay close attention to the renewal options. The lease should clearly state how and when you must exercise your option to renew, and on what terms the rent will be calculated for the new term. Vaguely worded renewal clauses are a common source of future disputes.
• Rent and Escalations: Understand what you’re paying for. A gross lease typically includes all costs in one flat rent payment. In contrast, a triple net (NNN) lease requires the tenant to pay a base rent plus a share of the property’s operating expenses, such as taxes, insurance, and maintenance. Most commercial leases also include rent escalation clauses, which increase your rent over time. Be sure you know how these increases are calculated.
• Maintenance and Repairs: The lease must clearly state which party is responsible for maintaining and repairing the property. Typically, a landlord is responsible for the roof, foundation, and major building systems, while the tenant handles routine maintenance within their own space. Ambiguity in this area could lead to costly disagreements.
• Subletting and Assignment: Your business needs may change. An assignment clause governs your ability to transfer the entire lease to another business, while a subletting clause allows you to rent out a portion of your space. Landlords usually require their consent for either, but you should negotiate for language that says their consent “shall not be unreasonably withheld.”
• Americans with Disabilities Act (ADA) Compliance: Federal law requires that commercial properties open to the public be accessible to individuals with disabilities. The lease should specify whether the landlord or the tenant is responsible for ensuring the property complies with ADA standards, including any future modifications that may be required.

How Can You Negotiate a More Favorable Lease?

Beyond the standard clauses, several key items are negotiable.

• A Tenant Improvement (TI) Allowance is money provided by the landlord to help you build out or customize the space for your business’s needs. This is a common point of negotiation and saves you significant upfront capital.
• You might also negotiate for Rent Abatement, which is a period of free rent, typically at the beginning of the lease term. This is particularly helpful to offset costs while your space is under construction and not yet generating revenue.
• For retail businesses, an Exclusivity Clause is a powerful tool. This provision prevents the landlord from leasing space in the same shopping center to a direct competitor, giving your business a protected market within that location.

Purchasing Commercial Property: Securing Your Business’s Future

Owning your commercial property is a game-changer. It offers stability, shields you from unpredictable rent hikes, and builds a valuable asset on your company’s balance sheet. A systematic approach, guided by legal and financial counsel, is needed to protect this major investment.

What is the Due Diligence Process for a Commercial Purchase?

Due diligence is the investigative period where you verify the condition and legal status of the property before the purchase is finalized. This is the most important phase of buying real estate.

• Title Search and Insurance: This is a thorough examination of public records to confirm that the seller has the legal right to transfer ownership. The search will uncover any liens, claims, or encumbrances on the property. A “cloud on the title” is a potential claim that could threaten your ownership rights and may require a quiet title action to resolve. Title insurance protects you from undiscovered issues that could arise after the sale.
• Physical Inspections and Environmental Assessments: You should hire qualified professionals to inspect the building’s structural integrity, roof, HVAC, plumbing, and electrical systems. An environmental assessment is also standard, especially for industrial properties, to check for soil or groundwater contamination that could lead to significant liability.
• Zoning and Land Use Review: You must confirm that your intended use for the property complies with local zoning ordinances. A property might look perfect, but if it’s not zoned for your type of business, it’s unusable. Review the relevant city or county code, such as the Seattle Municipal Code, for any specific restrictions or planned changes that could impact the property.

Key Legal Concepts in a Property Purchase

The purchase process is built around a few key legal documents and concepts.

• The Purchase and Sale Agreement (PSA): This is the central contract that governs the entire transaction. It details the purchase price, timeline, responsibilities of each party, and all the conditions that must be met for the deal to close. A well-drafted PSA is your primary protection.
• Contingencies: These are “escape clauses” in the PSA that allow you to back out of the deal without penalty if certain conditions aren’t met. Common contingencies include securing financing, receiving satisfactory inspection reports, and confirming a clean title. They provide a safety net, ensuring you don’t have to buy a property with unforeseen problems.
• Closing: This is the final step where you sign all the necessary documents, the funds are transferred to the seller, and the title is officially recorded in your business’s name. At this point, you become the legal owner of the property.

When Real Estate Disputes Arise: Protecting Your Interests

Even with careful planning, disagreements in commercial real estate occur. A landlord might fail to make promised repairs, a seller could neglect to disclose a known property defect, or a dispute might surface over a shared property line. Our firm handles these difficult disagreements for businesses, working to protect your rights and investments.

What Are Common Commercial Real Estate Disputes in Washington?

• Breach of Lease: This is when either the tenant or the landlord fails to honor a term in the lease agreement. For a tenant, this could be non-payment of rent. For a landlord, it could be the failure to maintain common areas or make essential repairs as stipulated in the contract.
• Purchase Agreement Disputes: These conflicts typically arise when a seller fails to disclose a known material defect with the property, such as a leaky roof or a foundation issue. Disputes also occur over the terms of the agreement itself, sometimes requiring a party to seek a remedy like specific performance, which is a court order compelling the other party to complete the transaction.
• Boundary and Easement Issues: Disagreements between neighboring property owners are common. They involve disputes over the exact location of a property line, or the rights associated with an easement, which grants one party the right to use another’s land for a specific purpose (e.g., a shared driveway).
• Eminent Domain: This is the power of the government to take private property for public use, such as for a new road or public park. The U.S. Constitution requires the government to pay “just compensation” for the property, but disagreements arise over what constitutes a fair market value.

What Key Trends Are Shaping Business Real Estate Decisions in 2025?

The Hybrid Work Effect

The move toward flexible work arrangements has changed what businesses look for in office space. While overall vacancy rates have been a concern, there’s a clear “flight to quality.” Businesses are choosing smaller footprints in premium buildings that offer better amenities to draw employees back to the office. This creates opportunities for tenants to negotiate favorable terms, but it also means that the best spaces are still in high demand.

Industrial and Logistics Demand

The engine of e-commerce continues to power a strong demand for industrial and logistics facilities. Businesses involved in manufacturing, warehousing, and third-party logistics (3PLs) find a competitive market for suitable properties, especially those providing easy access to major transportation corridors.

Zoning and Repurposing

Local governments are adapting to these new realities by updating zoning regulations. Cities like Seattle are exploring ways to make it easier to convert underused office buildings into residential or other uses. These changes in the Seattle Municipal Code create unique opportunities for businesses, but also add a layer of difficulty to purchasing and development that requires careful review.

Local Economic Hubs

Washington’s primary economic centers, particularly around the Puget Sound, continue to experience growth. This sustained economic activity supports stable real estate values but also maintains upward pressure on pricing, making a well-informed approach to leasing or buying more important than ever.

Frequently Asked Questions about Commercial Real Estate

How long does it take to close on a commercial property in Washington?

Closing on a commercial property typically takes longer than a residential transaction, usually ranging from 60 to 120 days. The timeline depends on the difficulty of the deal, the due diligence period, financing arrangements, and any necessary zoning or permit approvals.

Does a commercial landlord have to give notice before an eviction?

No. In Washington, a commercial landlord must provide the tenant with proper written notice before starting the eviction process, known as an unlawful detainer action. The type and length of notice depend on the reason for the eviction (e.g., a 14-day notice for non-payment of rent).

What is the difference between a letter of intent (LOI) and a lease agreement?

A Letter of Intent (LOI) is a preliminary, usually non-binding document that outlines the basic terms of a proposed lease to see if both parties are in general agreement before drafting a full contract. A lease agreement is the final, legally binding contract that contains all the detailed terms and conditions and is enforceable in court.

What should I do if my landlord isn’t making necessary repairs to my building?

First, review the lease to confirm the landlord’s repair obligations. Then, provide written notice to your landlord detailing the needed repairs. If the landlord still fails to act, you may have legal remedies under Washington law, but you should consult with an attorney before taking actions like withholding rent, as doing so improperly could put you in breach of the lease.

Your Business’s Foundation Depends on a Solid Real Estate Strategy

The property decisions you make either propel your business forward or create years of complications.

Our practice at Dickson Frohlich Phillips Burgess focuses on helping Washington business owners make sound real estate decisions and resolve disputes effectively. We’ll review your documents, explain your options in plain language, and work to protect your interests.

Your next step is a simple conversation. Call Dickson Frohlich Phillips Burgess today at (206) 621-1110.

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