Before you begin looking for a good for your small company,you should to get informed about the commercial space leasing procedure. Being ready will prevent you from making hurried decisions and costly mistakes you will probably regret later on. The following are some insider suggestions to help make an informed choice when leasing a commercial space your business
Initiate the process of searching commercial space at least 6-12 months before your current lease expires or until your ideal move-in-date. Finding the correct space and negotiating the deal will require 1-2 months depending on the size area and current market conditions. In most cases the spaces you like will require some type of improvements that the time needed will depend on the scope of work.
Thoroughly examine your business’s present and future needs. Consult with the different department heads for input as well as some key employees.
Get acquainted with allthe commercial property terms and meanings. Different landlords state and quote things otherwise. If you’re in doubt about what they mean do not be afraid to ask them to get more info.
If you’re not familiar with the commercial rental process or the present market conditions then consider engaging the help of a tenant agent. Their services do not cost you anything because landlords pay all of the rental commissions. The landlord agent 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 of the spaces that meet your requirements 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 agents a great deal of questions regarding who owns the property,property amenities,required lease duration,how much the landlord is willing to give in tenant improvement allowances,etc..
Do not settle for the first commercial properties you think is acceptable for your requirements: continue searching until you have at least two to 3 other choices. These additional options will work to your benefit since you will know what to expect throughout the lease negotiations and you will gain more leverage with numerous landlords competing for your company. They also give you something to fall back to if the negotiations for your first choice fall through.
Send out proposals to your top three to five choices. These are not legally binding. You never need to have a landlord representative’s verbal word. Everything should 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 each property. A few of the things you need to consider include the dimensions of this space,the inquiring base rental rates,the necessary lease duration,and the incremental costs (taxes,insurance,maintenance,etc). It is also possible to take note about the advantages and disadvantages 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 that are way over your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate and any operating expenditures then dividing by 12.
If some 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 just how much out of pocket you will 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 makes sense to go back to each landlord to negotiate additional concessions. Make 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 your 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 wise for you to hire an attorney to review the lease. For those who have a tenant representative then they can review the lease with you also. Industrial lease language can be negotiated. If you do not like certain lease items or would like to propose new language now is the time to do so.
Once the end of rental contract negotiations has ended the landlord will provide you a draft of the lease to sign.
There are several more things to think about when renting commercial property however these ideas will help get you going. If you’re a new company renting commercial space for the first time or an current company who has only rented 1 or two spaces then consider getting help from a tenant agent. Their services do not cost you anything and you will save a lot of money and time.