Before you start looking for a great commercial office for lease for your business,you need to get informed about the commercial property leasing procedure. Being ready will help prevent you from making rash decisions and costly mistakes thatyou will end up regretting later on. Below are some insider tips to help make an informed decision when leasing a commercial space your business
Start the process of finding commercial office space at least 6-12 months before your current lease expires or until your ideal move-in-date. Locating the correct space and negotiating the deal alonewill require 1-2 months depending upon the size space and current market conditions. Typically the spaces you like will require some type of improvements that the time required will depend on the scope of work.
completely research your company’s current and future needs. Consult with the different department heads for input in addition to some key employees.
Get familiar with the commercial space terms and meanings. Various landlords say and quote things differently. If you are unsure about what they mean don’t be afraid to ask them to provide more info.
If you are not familiar with the commercial real estate leasing process or the current market conditions then consider engaging the support of a tenant agent such as Austin Tenant Advisors. Their services don’t cost anything since landlords compensate 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 as well.
Personally see all of the properties that meet your requirements so thatyou can make a short 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 duration,how much the landlord is prepared to give in tenant improvement allowances,etc..
Do not settle for the first commercial properties you think is acceptable for your requirements: continue looking until you have at least two to 3 alternative options. These extra options will work to your benefit since you will know what to expect throughout the lease negotiations and you will gain more leverage with multiple landlords competing for your tenancy. 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 have 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 every property. Some of the things you need to consider include the size of this space,the inquiring base rental rates,the required lease term,and the incremental expenses (taxes,insurance,maintenance,etc). You can also 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 that 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 expenses then dividing by 12.
If any of the commercial property require reconfiguring then it’s important that you determine what changes you want on each and get preliminary bids. That way if the building owner is offering a tenant improvement allowance you will know how much out of pocket you will need to pay over and beyond what the building owner is prepared 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. Make certain you completely understand the total expenses you are expected to cover. Do not get emotionally attached to a certain property until the negotiations are over. Emotional attachment might lead to 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 lease contract.
Now it is time to review the commercial lease contract. It would be wise for you to hire an attorney to review the lease. If you have a tenant agent then they can review the lease with you also. Commercial lease language can be negotiated. If you don’t like particular lease items or would like to propose new language today is the time to do so.
Once the end of lease contract negotiations has finished the building owner will provide you a draft of the lease to sign.
There are many more things to consider when leasing commercial real estate however these tips will help get you going. If you are a new company leasing commercial space for the first time or an current company who has just leased 1 or two spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you will save a lot of money and time.