Before you begin looking for a great commercial space to lease for your company,you will need to get educated about the commercial office leasing process. Being prepared will prevent you from making rash decisions and costly mistakes you will probably regret in the future. The following are some insider suggestions to help make an informed decision when leasing a commercial office space your business
Start the process of finding commercial space at least 6-12 months before your existing lease terminates or until your perfect move-in-date. Locating the perfect space and negotiating the deal will take 1-2 months depending upon the size space and current market conditions. Typically the spaces you like will need some sort of improvements that the time required will depend on the scope of work.
Thoroughly research your business’s present and future needs. Consult with the various department heads for input as well as some key employees.
Get familiar with allthe commercial space terms and meanings. Different landlords state and quote things differently. If you’re in doubt about what they mean don’t be afraid to ask them to supply more info.
If you’re not knowledgeable about the commercial property leasing process or the present market conditions then consider engaging the support of a tenant rep. Their services don’t cost anything because building owners compensate all the leasing commissions. The landlord rep will have an experienced listing agent advising them so it would be a good idea for you to have one also.
Physically see all the properties that meet your needs so you can make a brief list. Bear in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord reps a lot of questions about who owns the property,property amenities,required lease term length,how much the landlord is willing to give in tenant construction allowances,etc..
Do not settle for the first commercial properties you believe is acceptable for your needs: continue looking until you have at least two to 3 other choices. 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 multiple building owners competing for your business. They also give you something to fall back to if the discussions for your first choice fall through.
Send out proposals to your top three to five choices. These aren’t legally binding. You don’t ever need to take a landlord representative’s verbal word. Everything needs to be in writing.
To help you decide what property is best suited for your company,prepare a spreadsheet to do an apples to apples comparison of every property. A few of the things you need to consider include the dimensions of the distance,the inquiring base 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 calculating the monthly base rents for each property then removing those which are way over your budget. The monthly base rent is calculated by multiplying the commercial space square feet from the asking base rate and any operating expenditures then dividing by 12.
If some of the commercial spaces need tenant improvements then it is 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 know how much out of pocket you’ll need to pay over and beyond what the landlord is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to go back to every landlord to negotiate additional concessions. Be certain you completely understand the total expenses you’re expected to cover. Do not get emotionally attached to a certain property until the discussions are over. Emotional attachment might result in you signing a contract your business can’t live up to.
After discussions are finalized and you’ve made your selection now it is time to have the landlord provide you the first draft of the commercial lease contract.
Now it is 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 agent then they could review the lease with you as well. Industrial lease language could be negotiated. If you don’t like certain lease items or would like to propose new language today is the time to do so.
Once the end of lease contract negotiations has ended the landlord will supply you a draft of the lease to sign.
There are several more things to think about when renting commercial property however these suggestions will help get you going. If you’re a new company renting commercial property for the first time or an existing company who has just leased 1 or two spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you’ll save a great deal of time and money. For more warehouse space lease tips click here.