Before you start looking for an excellent commercial office to rent for your small company,you will need to get educated about the commercial property leasing process. Being prepared will help prevent you from making foolish decisions and costly mistakes thatyou will end up regretting in the future. The following are some insider suggestions to help make an informed choice when renting a commercial real estate your business
Start the process of finding commercial space at least 6-12 months before your current lease expires or before your ideal move-in-date. Finding the right space and negotiating the deal will require 1-2 months depending upon the size space and current market conditions. In most cases the spaces you like will need some type of tenant improvements which the time required will depend on the scope of work.
completely analyze your company’s present and future needs. Consult with the various department heads for input in addition to some key employees.
Get acquainted with allthe commercial real estate terms and meanings. Various landlords state and quote things otherwise. If you’re in doubt about what they mean don’t be afraid to ask them to provide 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 rep such as Austin Tenant Advisors. Their services don’t cost anything because landlords compensate all the rental commissions. The landlord representative will have an knowledgable listing agent representing them so it would be a great idea for you to have one too.
Physically tour all the spaces that meet your requirements 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 agents a great deal of questions about the ownership,property amenities,required lease term length,how much the landlord is willing to give in tenant improvement allowances,etc..
Don’t settle for the first commercial properties you believe is acceptable for your requirements: continue looking until you have at least 2 to three alternative choices. These additional options will work to your advantage since you will know what to expect during 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 if the negotiations to your first choice fall through.
Send out proposals to your top three to five choices. These aren’t legally binding. You never need 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 business,prepare a spreadsheet to do an apples to apples comparison of every property. A few of the things you should put into consideration include the dimensions of the distance,the inquiring foundation rental rates,the necessary lease term,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 simply 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 commercial space square feet from the asking base rate plus any operating expenditures then dividing by 12.
If any of the commercial buildings need tenant improvements then it is crucial 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 just how much out of pocket you will have 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 return to every landlord to negotiate extra concessions. Make certain you fully understand the total expenses you’re 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 can’t live up to.
After negotiations are finalized and you’ve made your selection now it’s time to have the landlord offer you the first draft of the commercial rental contract.
Now it’s time to review the commercial rental contract. It would be advisable for you to hire an attorney to review the lease. If you have a tenant agent then they can review the lease with you as well. Industrial lease language can be negotiated. If you don’t like particular lease items or would like to propose new language now is the time to do so.
When the end of rental contract negotiations has ended the landlord will provide you a draft of the lease to sign.
There are many more things to think about when leasing commercial property however these ideas will help get you started. If you’re a new business leasing commercial property 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 do not cost you anything and you will save a great deal of time and money.