Before you begin looking for a great commercial real estate space for lease for your company,you will need to get educated about the commercial real estate leasing procedure. Being ready will keep you from making foolish decisions and costly mistakes thatyou will come to regret later on. The following are some insider suggestions to help make an informed choice when letting a commercial space your business
Start the process of hunting for commercial space at least 6-12 months before your current lease expires or until your perfect move-in-date. Locating the correct space and negotiating the deal alonewill take 1-2 months depending on the size space and current market conditions. In most cases the spaces you like will require some sort of tenant improvements which the time needed will depend on the scope of work.
Thoroughly examine your company’s present and future needs. Consult with the various department heads for input as well as some key employees.
Get acquainted with allthe commercial real estate terms and meanings. Different landlords say and quote things differently. If you’re unsure about what they mean don’t be afraid to ask them to provide more information.
If you’re not knowledgeable about the commercial real estate leasing process or the present market conditions then consider engaging the support of a tenant rep such as [dcl=8040]. Their services don’t cost anything since building owners pay all the leasing fees. The landlord rep will have an knowledgable listing agent representing them so it would be a great idea for you to have one as well.
Personally see all the spaces that meet your needs so thatyou can make a short list. Keep 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 term length,how much the landlord is willing to give in tenant improvement allowances,etc..
Do not settle for the first commercial properties you believe is acceptable for your needs: continue searching until you have at least 2 to three alternative options. These extra options will work to your advantage since you will know what to expect throughout the lease negotiations and you’ll gain more leverage with numerous building owners competing for your tenancy. They also give you something to fall back to if the negotiations for your first choice go sideways.
Send out proposals to your top three to five options. These aren’t legally binding. You don’t ever need to have a landlord representative’s verbal note. Everything should be in writing.
To help you decide what property is best suited for your business,prepare a spreadsheet to do an apples to apples comparison of every property. Some of the things you should consider include the dimensions of this space,the asking base rental rates,the necessary lease term,and the incremental costs (taxes,insurance,maintenance,etc). It is also possible to 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 removing those that are way above your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate and any operating expenses then dividing by 12.
If any of the commercial spaces require tenant improvements then it’s important that you figure out what improvements you want on each and get preliminary bids. That way if the landlord is offering a tenant improvement allowance you will learn 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 every landlord to negotiate additional concessions. Be certain you fully understand the total expenses you’re expected to cover. Do not 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’s time to have the landlord offer you the first draft of this commercial rental contract.
Now it’s time to review the commercial rental contract. It would be advisable for you to hire an attorney to review the lease. If you have a tenant agent then they could review the lease with you also. Commercial lease language could be negotiated. If you don’t like particular lease items or want to propose new language now is the time to do so.
Once the end of rental contract negotiations has ended the landlord will supply you a copy of the lease to review and sign.
There are several more things to think about when renting commercial property however these ideas will help get you started. If you’re a new business renting commercial space for the first time or an current business who has just 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 great deal of time and money.