Before you begin looking for an excellent business space for rent for your startup,you must to get informed about the commercial space leasing process. Being prepared should help prevent you from making impulsive decisions and costly mistakes thatyou will probably regret later on. Below are some insider suggestions to help make an informed choice when leasing a commercial property your business
Initiate the process of finding commercial space at least 6-12 months before your existing lease terminates or until your ideal move-in-date. Locating the right space and negotiating the deal alonewill require 1-2 months depending upon the size space and current market conditions. Typically the spaces you like will require some sort of changes that the time needed will depend on the scope of work.
completely examine 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 state and quote things differently. If you’re unsure about what they mean don’t be afraid to ask them to provide more info.
If you’re not knowledgeable about the commercial real estate leasing process or the current market conditions then consider engaging the help of a tenant rep. Their services don’t cost you anything since building owners compensate all of the leasing commissions. The landlord rep will have an professional listing agent helping them so it would be a great idea for you to have one as well.
Physically tour all of the spaces that meet your needs so thatyou can make a brief list. Keep in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord reps a lot of questions regarding the ownership,property amenities,required lease term length,how much the landlord is willing to give in tenant improvement allowances,etc..
Don’t settle for the first commercial properties you believe is acceptable for your needs: continue looking until you have at least two to three alternative options. These extra options will work to your benefit since you will know what to expect during the lease negotiations and you will gain more leverage with numerous building owners competing for your company. They also give you something to fall back to whether the discussions to your first choice go silent.
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 should put into consideration include the dimensions of this distance,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 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 commercial space square feet by the asking base rate plus any operating expenses then dividing by 12.
If some 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 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 return to each landlord to negotiate additional concessions. Be certain you fully 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 lead to you signing a contract thatyour business cannot live up to.
After discussions are finalized and you’ve 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 advisable for you to hire an attorney to review the lease. For those who have a tenant representative then they could review the lease with you also. Industrial lease language could be negotiated. If you don’t like certain lease items or want to propose new language now is the time to do so.
Once the end of rental contract negotiations has ended the building owner will supply you a draft of the lease to review and sign.
There are many more things to think about when renting commercial space however these suggestions will help get you started. If you’re a new company renting commercial space for the first time or an existing company who has only 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. For more warehouse space rental tips click here.