What should be a priority in a long-term lease agreement?

In a long-term lease agreement, escalation clauses should be prioritized because they provide a mechanism for addressing future increases in costs associated with property management, typically related to expenses such as taxes, maintenance, and insurance. These clauses help protect the landlord's interests by allowing them to adjust rental rates over time in line with inflation or increased operational costs. This ensures that the financial viability of the lease remains intact over its duration, making it a critical component for maintaining a balance between tenant affordability and landlord profitability.

While covenants play an important role in setting the responsibilities and rights of both parties, and tenant alterations are essential for accommodating the tenant’s needs, the escalation clause is particularly crucial for long-term agreements because it helps mitigate the financial risks that can arise over numerous years. Owner occupancy can also be a significant factor but may not be as relevant in terms of the ongoing financial management of the lease itself.