Before you begin searching for the perfect commercial space to rent for your business, you must to get informed about the commercial office leasing procedure. Being prepared should prevent you from making foolish decisions and costly mistakes thatyou will probably regret in the future. The following are some insider suggestions to help make an informed decision when renting a commercial real estate your company
Start the process of locating commercial space at least 6-12 months before your current lease terminates or until your perfect move-in-date. Locating the perfect space and negotiating the deal will take 1-2 months depending on the size space and current market conditions. Typically the spaces you like will require some sort of changes that the time needed will depend on the scope of work.
Thoroughly examine your company’s current and future needs. Consult with the different department heads for input in addition to some key employees.
Get acquainted with the commercial property terms and meanings. Different landlords say and quote things otherwise. If you’re in doubt about what they mean do not be afraid to ask them to get more information.
If you’re not knowledgeable about the commercial property leasing process or the current market conditions then consider engaging the assistance of a tenant agent such as AustinTenantAdvisors. Their services do not cost you anything because landlords pay all of the rental commissions. The landlord agent will have an experienced listing agent helping them so it would be a great idea for you to have one also.
Physically visit all of the spaces that meet your requirements so thatyou can make a brief list. Keep in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord reps a lot of questions regarding the ownership, property amenities, required lease duration, how much the landlord is willing to give in tenant construction allowances, etc..
Don’t settle for the first commercial space you believe is acceptable for your requirements: continue looking until you have at least 2 to three alternative choices. These extra options will work to your benefit because you will know what to expect during the lease negotiations and you will gain more leverage with multiple landlords competing for your business. They also give you something to fall back to if the discussions to your first choice go sideways.
Send out proposals to your top three to five choices. These are not legally binding. You don’t ever want to have a landlord agent’s verbal note. Everything needs to 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 size of this space, the asking foundation 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 calculating the monthly base rents for each property then eliminating those which are way over your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate plus any operating expenditures then dividing by 12.
If some of the commercial buildings require tenant improvements then it is crucial 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 know just how much out of pocket you will have to pay over 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 additional concessions. Make certain you fully understand the total expenses you’re expected to cover. Don’t get emotionally attached to a certain property until the discussions are over. Emotional attachment might lead to you signing a contract thatyour business cannot live up to.
After discussions are finalized and you’ve 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 reassess the commercial rental contract. It would be wise 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. Commercial lease language could be negotiated. If you do not like certain lease items or would like to propose new language today is the time to do so.
When the end of rental contract negotiations has ended the landlord will supply you a draft of the lease to review and sign.
There are many more things to think about when leasing commercial real estate however these tips will help get you going. If you’re a new company leasing commercial property for the first time or an current company who has just leased one or 2 spaces then consider getting help from a tenant agent. Their services do not cost you anything and you will save a lot of time and money.