Before you start looking for the perfect business space to lease for your business, you need to get informed about the commercial office leasing process. Being ready will prevent you from making hurried decisions and costly mistakes thatyou will probably regret later on. The following are some insider suggestions to help make an informed choice when letting a commercial property your company
Initiate the process of hunting for commercial rental space at least 6-12 months before your current lease expires or before your perfect move-in-date. Locating the perfect space and negotiating the deal alonewill require 1-2 months depending upon the size area and current market conditions. Typically the spaces you like will require some sort of tenant improvements that the time needed will depend on the scope of work.
Thoroughly examine your business’s current and future needs. Consult with the various department heads for input in addition to some key employees.
Get acquainted with allthe commercial space terms and meanings. 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 info.
If you are not familiar with the commercial property leasing process or the current market conditions then consider engaging the support of a tenant representative such as Austin Tenant Advisors. Their services do not cost you anything since building owners pay all the leasing fees. The landlord representative will have an knowledgable listing agent advising them so it would be a great idea for you to have one too.
Personally tour all the properties that meet your needs so thatyou can make a brief list. Bear in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord representatives a lot of questions regarding who owns the property, property amenities, required lease duration, how much the landlord is prepared to give in tenant improvement allowances, etc..
Don’t settle for the first commercial properties you think is acceptable for your needs: continue looking until you have at least 2 to three other choices. These additional options will work to your benefit because you will know what to expect during the lease negotiations and you will gain more leverage with numerous building owners competing for your business. They also give you something to fall back to if the negotiations to your first choice go sideways.
Send out proposals to your top three to five choices. These aren’t legally binding. You don’t ever want to take a landlord representative’s verbal note. Everything should be in writing.
To help you decide what property is best suited for your business, prepare a spreadsheet to do an apples to apples comparison of every property. A few of the things you should consider include the dimensions of this space, the inquiring foundation rental rates, the necessary lease term, and the incremental costs (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 simply 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 expenses then dividing by 12.
If some of the commercial spaces require tenant improvements then it’s important that you determine what improvements you want on each and get preliminary bids. This way if the landlord is offering a tenant improvement allowance you will learn how much out of pocket you will have to pay over and beyond what the landlord is prepared to give.
Carefully examine 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 are expected to cover. Don’t get emotionally attached to a specific property until the negotiations are over. Emotional attachment might lead to you signing a contract thatyour business cannot live up to.
After negotiations are finalized and you have made your selection now it’s time to have the landlord provide you the first draft of this commercial rental contract.
Now it’s time to reassess the commercial rental contract. It would be advisable for you to hire an attorney to review the lease. For those who 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 rental contract negotiations has finished the building owner will give you a copy of the lease to review.
There are several more things to think about when renting commercial space however these suggestions will help get you started. If you are a new business renting commercial space for the first time or an current business who has just leased 1 or 2 spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you will save a great deal of money and time.