Before you begin looking for the perfect business space to lease for your startup,you should to get informed about the commercial space leasing process. Being ready will help prevent you from making expeditious decisions and costly mistakes thatyou will end up regretting in the future. Below are some insider suggestions to help make an informed choice when leasing a commercial office space your business
Initiate the process of hunting for commercial space at least 6-12 months before your current lease terminates or until your perfect move-in-date. Locating the right space and negotiating the deal alonewill take 1-2 months depending upon the size area and current market conditions. Typically the spaces you like will require some sort of changes that the time required will depend on the scope of work.
Thoroughly examine your business’s current and future needs. Consult with the different department heads for input in addition to some key employees.
Get familiar with the commercial property terms and definitions. Different landlords state and quote things otherwise. If you’re in doubt about what they mean don’t be afraid to ask them to get more information.
If you’re not knowledgeable about the commercial leasing process or the current market conditions then consider engaging the assistance of a tenant agent such as www.AustinTenantAdvisors.com. Their services don’t cost anything since landlords compensate all of the rental fees. The landlord agent will have an knowledgable listing agent advising them so it would be a great idea for you to have one too.
Physically visit all of the properties that meet your requirements so thatyou can make a short list. Keep in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord representatives a lot 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 properties 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 because you will know what to expect during the lease negotiations and you’ll gain more leverage with multiple landlords competing for your company. They also give you something to fall back to whether the negotiations to your first choice fall through.
Send out proposals to your top three to five options. These are not legally binding. You never need to take a landlord agent’s verbal note. 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. A few of the things you should put into consideration include the size of this space,the asking base rental rates,the necessary 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 simply calculating the monthly base rents for each property then removing those that 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 some of the commercial property require finish out then it’s important that you figure out what improvements you want on each and get prelim construction bids. This way if the building owner is offering a tenant improvement allowance you will know how much out of pocket you’ll need to pay above and beyond what the building owner is prepared to give.
Carefully analyze and compare the terms of each proposal. Consider whether it makes sense to go back to each landlord to negotiate extra concessions. Be certain you completely understand the total expenses you’re expected to cover. Do not get emotionally attached to a specific 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’s time to have the landlord provide you the first draft of this 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. If you have a tenant agent then they could review the lease with you as well. Industrial lease language could be negotiated. If you don’t 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 provide you a draft of the lease to review.
There are many more things to consider when leasing commercial property however these suggestions will help get you started. If you’re a new company leasing space for the first time or an current company who has just leased one or 2 spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you’ll save a lot of money and time.