Before you start searching for an excellent commercial space for lease for your small business,you must to get educated about the commercial office leasing procedure. Being ready should prevent you from making foolish decisions and costly mistakes thatyou will end up regretting in the future. The following are some insider tips to help make an informed decision when leasing a commercial property your business
Start the process of finding commercial space at least 6-12 months before your existing lease expires or until your perfect move-in-date. Finding the right space and negotiating the deal will require 1-2 months depending on the size area and current market conditions. Typically the spaces you like will need some type of modifications which the time required will depend on the scope of work.
completely analyze your company’s current and future needs. Consult with the different department heads for input as well as some key employees.
Get familiar with allthe commercial space terms and meanings. Various landlords state and quote things differently. If you’re in doubt about what they mean do not be afraid to ask them to provide more info.
If you’re not knowledgeable about the commercial rental process or the current market conditions then consider engaging the support of a tenant agent such as www.AustinTenantAdvisors.com. Their services do not cost you anything because building owners compensate all of the leasing fees. The landlord rep will have an expert listing agent advising them so it would be a good idea for you to have one also.
Physically visit all of the spaces that meet your needs so thatyou can make a brief list. Bear in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord agents a lot of questions regarding the ownership,property amenities,required lease duration,how much the landlord is willing to give in tenant improvement allowances,etc..
Don’t settle for the first commercial space you believe is acceptable for your needs: continue looking until you have at least 2 to 3 alternative options. These extra options will work to your advantage because you will know what to expect throughout the lease negotiations and you’ll gain more leverage with multiple building owners competing for your business. They also give you something to fall back to whether the negotiations for your first choice go silent.
Send out proposals to your top three to five options. These aren’t legally binding. You don’t ever need to take a landlord agent’s verbal note. Everything should be in writing.
To help you decide what property is most suitable for your company,prepare a spreadsheet to do an apples to apples comparison of each property. Some of the things you need to put into consideration include the dimensions of this space,the inquiring foundation rental rates,the necessary lease duration,and the incremental expenses (taxes,insurance,maintenance,etc). You can also take note about the pros and cons of each property. If you’re budget conscious then you can quickly narrow down the list by simply calculating the monthly base rents for each property then eliminating those which are way above your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate plus any operating expenses then dividing by 12.
If some of the commercial spaces need tenant improvements then it’s important that you determine what improvements you want on each and get preliminary bids. That way if the landlord is offering a tenant improvement allowance you will know just how much out of pocket you’ll have to pay above and beyond what the landlord is willing to give.
Carefully examine and compare the terms of each proposal. Consider whether it is logical to return to each landlord to negotiate extra concessions. Be certain you fully understand the total expenses you’re expected to cover. Don’t get emotionally attached to a specific property until the negotiations are over. Emotional attachment might result in you signing a contract thatyour business can’t live up to.
After negotiations are finalized and you have made your selection now it is time to have the landlord offer you the first draft of this commercial rental contract.
Now it is time to review the commercial rental contract. It would be advisable for you to hire an attorney to review the lease. For those who have a tenant representative then they could review the lease with you as well. Industrial lease language could be negotiated. If you do not like particular lease items or would like to propose new language now is the time to do so.
Once the end of rental contract negotiations has ended the landlord will provide you a copy of the lease to sign.
There are many more things to think about when leasing commercial space however these ideas will help get you going. If you’re a new company leasing commercial space for the first time or an existing company who has only leased 1 or 2 spaces then consider getting help from a tenant rep. Their services do not cost you anything and you’ll save a lot of time and money.