Ten Tips for Upgrading the AIR Commercial Real Estate Lease Form

Jo Ann Woodsum¹

Jo Ann Woodsum is a solo practitioner specializing in commercial leasing. Her clients range from high tech office tenants to large institutional landlords to small business owners. She frequently presents on commercial real estate leasing topics and is a contributing author to CEB’s Office and Retail Leasing handbooks. She founded the Women in Leasing Law series of symposia which is in its seventh year. She recently qualified as a solicitor in England and Wales.

The AIR lease forms have frustrated commercial leasing attorneys for decades in California. Whether representing landlords or tenants, there are many aspects of the AIR lease forms, which contain a multitude of non-market and eccentric terms, that need to be modified to prove more effective and more consistent with commercial leasing practice in California.²

Using the AIR lease forms present several challenges, including the requirement to use the AIR CRE software.³ This is a proprietary software and the parties ultimately end up signing a cumulative redline of the lease.⁴ The theory behind this is that if the parties are very familiar with the form, then after signing, it will be easy to quickly determine the changes to the form lease made for a particular lease transaction. However, in our experience, the businesspeople are almost never familiar with the forms and few attorneys are comfortable with them either. Yet commercial real estate brokers continue to promote these forms as the "easy" way to complete a transaction, although this is rarely the case.