The Best Way To Rent Commercial Real EstateThe Best Way To Rent Commercial Real Estate
Before you begin searching for the perfect commercial property rental for lease for your small company,you need to get educated about the commercial property leasing process. Being ready should help prevent you from making rash decisions and costly mistakes thatyou will come to regret in the future. The following are some insider suggestions to help make an informed choice when renting a commercial space your business
Start the process of searching for commercial space at least 6-12 months before your existing lease expires or until your perfect move-in-date. Finding the perfect space and negotiating the deal will require 1-2 months depending on the size area and current market conditions. In most cases the spaces you like will require some sort of changes that the time required will depend on the scope of work.
Thoroughly analyze your company’s present and future needs. Consult with the different department heads for input as well as some key employees.
Get acquainted with allthe commercial space 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 leasing process or the present market conditions then consider engaging the assistance of a tenant rep such as AustinTenantAdvisors. Their services don’t cost anything because landlords compensate all the rental fees. The landlord agent will have an experienced listing agent helping 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 reps a great deal of questions regarding the ownership,property amenities,required lease duration,how much the landlord is prepared to give in tenant improvement allowances,etc..
Do not settle for the first commercial space you believe is suitable for your requirements: continue searching until you have at least 2 to 3 alternative choices. These extra options will work to your advantage because you will know what to expect during the lease negotiations and you will gain more leverage with multiple landlords competing for your company. They also give you something to fall back to if the discussions for your first choice go sideways.
Send out proposals to your top three to five choices. 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 business,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 size of the space,the asking base rental rates,the necessary 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 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 from the asking base rate plus any operating expenses then dividing by 12.
If any of the commercial properties require finish out then it is important 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 how much out of pocket you will need 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 return to every landlord to negotiate additional concessions. Make sure you fully understand the total expenses you’re expected to cover. Do not get emotionally attached to a specific property until the discussions are over. Emotional attachment might lead to you signing a contract thatyour business can’t live up to.
After discussions are finalized and you’ve 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 review the commercial rental contract. It would be wise 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 as well. Industrial lease language can be negotiated. If you don’t like particular 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 landlord will provide you a copy of the lease to sign.
There are many more things to consider when renting commercial property however these suggestions will help get you going. If you’re a new business renting commercial property for the first time or an existing business who has just rented 1 or 2 spaces then consider getting help from a tenant agent. Their services do not cost you anything and you will save a lot of time and money.