Before you begin looking for a good commercial office for lease for your company, you must to get informed about the commercial real estate leasing procedure. Being prepared should prevent you from making expeditious decisions and costly mistakes you will regret later on. Below are some insider tips to help make an informed decision when renting a commercial property your company
Start the process of hunting 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 upon the size area and current market conditions. Typically the spaces you like will require some type of improvements which the time needed will depend on the scope of work.
completely research your company’s present and future needs. Consult with the different department heads for input in addition to some key employees.
Get acquainted with allthe commercial real estate terms and definitions. Various landlords state and quote things differently. If you’re unsure about what they mean do not be afraid to ask them to provide more information.
If you’re not familiar with the commercial real estate leasing process or the present market conditions then consider engaging the help of a tenant agent such as AustinTenantAdvisors. Their services do not cost anything since building owners compensate all the leasing commissions. The landlord rep will have an expert listing agent advising them so it would be a good idea for you to have one too.
Personally visit all the properties that meet your needs so you can make a short list. Keep in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord reps a lot of questions about the ownership, property amenities, required lease term length, how much the landlord is willing to give in tenant construction allowances, etc..
Don’t settle for the first commercial space you believe is suitable for your needs: continue searching until you have at least two to three other options. These extra options will work to your benefit because you will know what to expect during the lease negotiations and you’ll 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 never need to have a landlord representative’s verbal word. Everything needs to 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. A few of the things you need to put into consideration include the size of the space, the inquiring base rental rates, the required lease duration, and the incremental costs (taxes, insurance, maintenance, etc). It is also possible to 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 eliminating those that are way over your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate and any operating expenditures then dividing by 12.
If any of the commercial spaces require tenant improvements then it is 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 know how much out of pocket you’ll need to pay over and beyond what the landlord is willing to give.
Carefully examine and compare the terms of each proposal. Consider whether it makes sense to go back to every landlord to negotiate extra concessions. Make sure 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 your business cannot 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 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 can review the lease with you also. 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 finished the building owner will supply you a draft of the lease to review.
There are several more things to think about when leasing commercial space however these ideas will help get you started. If you’re a new company leasing space for the first time or an current company who has only leased one or two spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you’ll save a great deal of money and time.