Arizona Commercial Lease Guide

Commercial Lease Guide for Arizona

A practical, tenant-focused guide to reviewing Arizona commercial leases — not legal advice.

Key Lease Considerations

Arizona is a fast-moving commercial market in many metros. Lease costs can be less about base rent and more about HVAC, utilities, and pass-throughs (CAM, taxes, and insurance).

This guide highlights what to review so you can budget accurately and avoid “surprise replacement” clauses — especially for rooftop HVAC and common area items.

Major markets

Where we see the most leasing activity.

Phoenix
Tucson
Mesa
Scottsdale/Tempe

Common lease types

Typical structures and what to watch.

Retail: NNN or modified gross (CAM definitions matter)
Industrial: NNN (roof, pavement, and HVAC responsibilities often negotiated)
Office: modified gross (watch escalations and utility allocation)

Cost drivers

Items that often create surprise bills.

Rooftop HVAC repair vs. replacement language
Electricity demand charges and submetering
CAM definitions and management fees
Taxes/fees pass-throughs tied to rent (confirm what applies in your location)

Negotiation checklist

HVAC: repair vs. replacement

If you’re responsible for HVAC, negotiate a replacement cap or landlord amortization. Rooftop units can be a major unexpected cost in hot climates.

Utilities and submetering

Prefer submetering. If allocated, require a transparent formula and limit “administrative” add-ons.

CAM caps and exclusions

Get a CAM budget, annual reconciliation, audit rights, and exclude capital replacements and landlord overhead that doesn’t directly benefit tenants.

Tax/fee pass-through clarity

Arizona locations may have rent-related taxes/fees that landlords try to pass through. Don’t accept vague language — define exactly what can be billed and require documentation.

Water and landscaping

Clarify who pays for irrigation, landscaping, and water systems (especially in retail centers). Make sure leaks and system failures aren’t automatically your expense.

Default and remedies

Add written notice + cure and avoid aggressive remedies (acceleration, attorney fees without limits). The best lease is one you can survive during a tough month.

Official resources

Arizona Corporation Commission — entity search Arizona Department of Revenue Arizona SBDC Network

Not legal advice. Always verify local requirements and consult qualified professionals for your situation.

Common Red Flags in Arizona

Commercial real estate in Arizona typically favors the landlord in standard lease drafts. Whether you are in Phoenix or elsewhere, you need to watch out for:

Uncapped NNN Charges: Variable costs like property taxes and insurance can skyrocket.
Broad Indemnification: Clauses that require you to pay for the landlord's negligence.
Relocation Clauses: Rights for the landlord to move your business to a worse location.

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Frequently Asked Questions

Are NNN leases common in Arizona?

Yes — many Arizona retail and industrial leases are NNN or modified gross. The key is understanding CAM, taxes/fees, and insurance pass-throughs before committing.

What’s the #1 clause Arizona tenants overlook?

HVAC replacement. A lease can quietly shift replacement of expensive rooftop units to the tenant. Negotiate repair vs. replacement and cap your exposure.

How do I budget total occupancy cost in Arizona?

Start with base rent, then add estimated CAM/NNN, utilities (especially electricity), insurance, and any taxes/fees that may be billed through. Ask for prior-year CAM statements and utility allocation details.

Does BizLeaseCheck replace a lawyer for my Arizona lease?

No. It helps you identify common traps quickly and compare options, but it’s not legal advice. For a high-stakes lease, use it alongside a commercial lease attorney.

Where can I verify a company in Arizona?

Use the Arizona Corporation Commission entity search to confirm legal entity names and status before signing.