IRVINE, CA—Whether you're a landlord or a tenant, it's critical to know your business objectives and where you want to be down the road in order to get the right deal terms in a lease, the Saywitz Co.'s president Barry Saywitz tells GlobeSt.com. He also says there are pros and cons to both longer and shorter leases. We spoke with him about those pros and cons and how each type of lease term is affected by the delivery of new inventory.

GlobeSt.com: What are the advantages and disadvantages of longer leases for landlords and tenants at this point in the real estate cycle?

Saywitz: You have to look at both sides of the coin. In a hot market, the advantage of a longer-term lease for a landlord is that they can take advantage of the fact that rates are up, so they can lock in the lease at the higher end of cycle with annual escalations. Overall, that rent picture is good for them. If the tenant is there for the long term, the landlord can secure cash flow with an overall better return, and if refinance rates are still attractive, they can put improvements in place. Also, if the landlord is planning to sell down the road, a longer-term lease adds value to the property overall—should the market turn in the future, the tenant is still locked in at a higher rate, which keeps cash flow up. Regardless of rates, whatever capital I put in today, I can amortize it over time, and I won't have to spend more money if the tenant leaves in three, five or 10 years.