Before you begin searching for the perfect commercial space to lease for your business,you should to get educated about the commercial office leasing process. Being ready should keep you from making rapid decisions and costly mistakes you will come to regret later on. Below are some insider suggestions to help make an informed decision when leasing a commercial property your business
Start the process of locating commercial space at least 6-12 months before your existing lease terminates or until your perfect move-in-date. Locating the correct space and negotiating the deal will require 1-2 months depending upon the size space and current market conditions. Typically the spaces you like will require some sort of improvements that the time needed will depend on the scope of work.
completely examine your company’s present and future needs. Consult with the different department heads for input as well as some key employees.
Get familiar with the commercial space terms and definitions. Different landlords say and quote things differently. If you are unsure about what they mean do not be afraid to ask them to get more information.
If you are not familiar with the commercial real estate leasing process or the present market conditions then consider engaging the assistance of a tenant representative such as [dcl=7999]. Their services do not cost anything since building owners compensate all of the leasing fees. The landlord representative will have an knowledgable listing agent representing them so it would be a good idea for you to have one as well.
Physically see all of the spaces that meet your requirements so you can make a short list. Keep in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord reps a great deal of questions about the ownership,property amenities,required lease term length,how much the landlord is willing to give in tenant construction allowances,etc..
Don’t settle for the first commercial properties you believe is acceptable for your requirements: continue looking until you have at least 2 to 3 alternative options. These extra options will work to your advantage since you will know what to expect during the lease negotiations and you’ll gain more leverage with multiple building owners competing for your company. They also give you something to fall back to whether the negotiations for your first choice fall through.
Send out proposals to your top three to five options. These are not legally binding. You don’t ever want to take a landlord agent’s verbal word. 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 every property. A few of the things you should put into consideration include the dimensions of the space,the asking base rental rates,the necessary lease duration,and the incremental expenses (taxes,insurance,maintenance,etc). It is also possible to take note about the pros and cons of each property. If you are budget conscious then you can quickly narrow down the list by calculating the monthly base rents for each property then removing those which are way above your budget. The monthly base rent is calculated by multiplying the commercial space square feet from the asking base rate and any operating expenses then dividing by 12.
If any of the commercial spaces require changes then it’s important that you figure out what changes you want on each and get preliminary bids. That way if the landlord is offering a tenant improvement allowance you will learn just how much out of pocket you’ll need 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 completely understand the total expenses you are expected to cover. Don’t get emotionally attached to a certain property until the negotiations are over. Emotional attachment might result in you signing a contract your business can’t live up to.
After negotiations are finalized and you’ve made your selection now it’s time to have the landlord offer you the first draft of the commercial lease contract.
Now it’s time to review the commercial lease contract. It would be advisable for you to hire an attorney to review the lease. If you have a tenant representative then they could review the lease with you as well. Commercial lease language could be negotiated. If you do not like certain lease items or want to propose new language now is the time to do so.
When the end of lease contract negotiations has ended the landlord will give you a copy of the lease to sign.
There are several more things to think about when renting commercial real estate however these tips will help get you going. If you are a new company renting commercial space for the first time or an existing company who has just leased one or 2 spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you’ll save a lot of time and money.