Before you begin searching for an excellent for your company, you must to get informed about the commercial space leasing procedure. Being prepared should keep you from making hasty decisions and costly mistakes you will come to regret later on. Below are some insider tips to help make an informed choice when leasing a commercial property your company
Initiate the process of hunting for commercial warehouse space at least 6-12 months before your existing lease expires or until your ideal move-in-date. Locating the right 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 type of changes 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 property terms and meanings. Different landlords say 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 knowledgeable about the commercial property leasing process or the current market conditions then consider engaging the help of a tenant rep. Their services don’t cost you anything because building owners compensate all of the rental commissions. The landlord rep will have an expert listing agent advising them so it would be a good idea for you to have one also.
Physically visit all of the spaces that meet your requirements so you can make a brief list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord agents a great deal of questions regarding the ownership, property amenities, required lease duration, how much the landlord is prepared to give in tenant construction allowances, etc..
Don’t settle for the first commercial space you believe is suitable for your requirements: continue searching until you have at least two to three other options. 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 multiple building owners competing for your business. They also give you something to fall back to if the discussions to your first choice fall through.
Send out proposals to your top three to five options. These aren’t legally binding. You never want to have a landlord agent’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 each property. Some of the things you need to consider include the size of this distance, the asking base rental rates, the required lease term, and the incremental expenses (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 removing those that are way over your budget. The monthly base rent is calculated by multiplying the commercial space square feet by the asking base rate and any operating expenses then dividing by 12.
If any 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 know how much out of pocket you will have to pay over and beyond what the landlord is prepared to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to return to each landlord to negotiate additional concessions. Be certain you completely understand the total expenses you’re expected to cover. Don’t get emotionally attached to a certain property until the discussions are over. Emotional attachment might result in you signing a contract your business cannot live up to.
After discussions are finalized and you have made your selection now it is time to have the landlord provide you the first draft of this commercial rental contract.
Now it is time to reassess the commercial rental contract. It would be wise 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 don’t 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 landlord will supply you a copy of the lease to sign.
There are many more things to think about when leasing commercial property however these tips will help get you started. If you’re a new company leasing commercial space for the first time or an existing company who has just rented 1 or two spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you will save a lot of money and time.
