Before you start looking for an excellent commercial space for lease for your startup company,you must to get educated about the commercial property leasing procedure. Being ready will prevent you from making hasty decisions and costly mistakes thatyou will end up regretting later on. The following are some insider tips to help make an informed choice when leasing a commercial space your company
Start the process of hunting for commercial space at least 6-12 months before your existing lease expires or until your perfect move-in-date. Locating the correct space and negotiating the deal will require 1-2 months depending upon the size area and current market conditions. Typically the spaces you like will require some type of modifications which the time required will depend on the scope of work.
Thoroughly analyze 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 real estate terms and meanings. Various landlords say and quote things otherwise. If you’re in doubt about what they mean do not be afraid to ask them to provide more info.
If you’re not familiar with the commercial property leasing process or the current market conditions then consider engaging the help of a tenant rep such as AustinTenantAdvisors. Their services do not cost you anything since building owners pay all of the leasing commissions. The landlord rep will have an professional listing agent helping them so it would be a great idea for you to have one also.
Physically see all of the properties that meet your requirements so thatyou can make a short list. Keep in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord reps a great deal 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 space you believe is suitable for your requirements: continue looking until you have at least 2 to three alternative options. 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 multiple building owners competing for your business. They also give you something to fall back to if the negotiations to your first choice go silent.
Send out proposals to your top three to five options. These aren’t legally binding. You don’t ever want to have a landlord representative’s verbal note. Everything needs to 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 size of the 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’re budget conscious then you can quickly narrow down the list by calculating the monthly base rents for each property then removing those which are way above your budget. The monthly base rent is calculated by multiplying the commercial space square feet by the asking base rate plus any operating expenses then dividing by 12.
If some of the commercial properties require tenant improvements then it’s essential that you figure out what changes you want on each and get construction 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 above and beyond what the landlord is prepared to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to go back to each landlord to negotiate extra concessions. Make certain you completely 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 have made your selection now it’s time to have the landlord provide you the first draft of the 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. If you have a tenant representative then they can review the lease with you as well. Commercial lease language can be negotiated. If you do not like certain lease items or want 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 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 existing company who has just leased one or 2 spaces then consider getting help from a tenant rep. Their services do not cost you anything and you will save a lot of time and money.