Before you begin searching for the perfect business space for rent for your company, you need to get educated about the commercial office leasing process. Being prepared will keep you from making hurried decisions and costly mistakes thatyou will regret later on. Below are some insider suggestions to help make an informed choice when letting a commercial property your company
Initiate the process of hunting for commercial office space at least 6-12 months before your current lease expires or until your perfect move-in-date. Locating the correct space and negotiating the deal alonewill require 1-2 months depending on the size area and current market conditions. In most cases the spaces you like will need some sort of modifications which the time needed will depend on the scope of work.
completely research your business’s present and future needs. Consult with the different department heads for input as well as some key employees.
Get familiar with allthe commercial real estate terms and meanings. Different landlords say and quote things otherwise. If you’re in doubt about what they mean do not be afraid to ask them to get more information.
If you’re not familiar with the commercial rental process or the present market conditions then consider engaging the support of a tenant agent such as AustinTenantAdvisors. Their services do not cost anything because landlords pay all the rental commissions. The landlord representative will have an experienced listing agent advising them so it would be a good idea for you to have one also.
Personally see all the properties that meet your requirements so thatyou can make a short list. Bear in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord agents a lot of questions regarding the ownership, property amenities, required lease duration, how much the landlord is willing to give in tenant construction allowances, etc..
Don’t settle for the first commercial space you think is suitable for your requirements: continue looking until you have at least two to three other choices. These extra options will work to your benefit since you will know what to expect throughout the lease negotiations and you will gain more leverage with numerous landlords competing for your company. They also give you something to fall back to if the negotiations for your first choice go silent.
Send out proposals to your top three to five choices. 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 best suited for your company, prepare a spreadsheet to do an apples to apples comparison of every property. Some of the things you need to put into consideration include the dimensions of the distance, the asking foundation rental rates, the necessary lease duration, 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 calculating the monthly base rents for each property then eliminating those which are way above your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate plus any operating expenditures then dividing by 12.
If some of the commercial buildings need tenant improvements then it is critical that you determine what improvements 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 willing 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. Make sure you fully understand the total expenses you’re expected to cover. Don’t get emotionally attached to a certain property until the negotiations are over. Emotional attachment might result in you signing a contract thatyour business cannot live up to.
After negotiations are finalized and you have made your selection now it is time to have the landlord offer you the first draft of the commercial rental contract.
Now it is 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.
Once the end of rental contract negotiations has finished the landlord will give you a copy of the lease to review.
There are several more things to consider when renting commercial real estate however these suggestions will help get you going. If you’re a new company renting commercial property for the first time or an current company who has only rented 1 or two spaces then consider getting help from a tenant representative. Their services do not cost you anything and you will save a lot of money and time.