Before you start looking for a good commercial property rental for lease for your startup company,you will need to get educated about the commercial space leasing procedure. Being prepared should keep you from making impulsive decisions and costly mistakes thatyou will come to regret in the future. Below are some insider suggestions to help make an informed decision when renting a commercial real estate your company
Start the process of finding commercial space at least 6-12 months before your existing lease expires or before your perfect move-in-date. Finding the perfect space and negotiating the deal will take 1-2 months depending on the size area and current market conditions. In most cases the spaces you like will require some sort of tenant improvements that the time needed 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 real estate terms and definitions. Different landlords state and quote things differently. If you’re unsure about what they mean don’t be afraid to ask them to supply more information.
If you’re not knowledgeable about the commercial rental process or the current market conditions then consider engaging the assistance of a tenant agent such as AustinTenantAdvisors.com. Their services don’t cost you anything since building owners pay all of the leasing commissions. The landlord representative will have an knowledgable listing agent advising them so it would be a great idea for you to have one as well.
Physically see all of the spaces that meet your needs so thatyou can make a short list. Keep in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord representatives a great deal of questions regarding who owns the property,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 think is acceptable for your needs: continue looking until you have at least 2 to 3 other options. These additional options will work to your benefit because you will know what to expect throughout the lease negotiations and you’ll gain more leverage with multiple building owners competing for your tenancy. They also give you something to fall back to if the negotiations to your first choice go sideways.
Send out proposals to your top three to five options. These aren’t legally binding. You don’t ever need to take a landlord agent’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 each property. Some of the things you need to consider include the size of this space,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 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 removing those that are way over your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate and any operating expenditures then dividing by 12.
If any of the commercial buildings require tenant improvements then it is important that you determine what changes 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’ll have to pay over and beyond what the landlord is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it makes sense to return to each landlord to negotiate additional concessions. Make sure you completely understand the total expenses you’re expected to cover. Don’t get emotionally attached to a specific property until the negotiations are over. Emotional attachment might lead to you signing a contract thatyour business can’t live up to.
After negotiations are finalized and you have made your selection now it’s time to have the landlord offer you the first draft of this commercial lease contract.
Now it’s time to reassess the commercial lease contract. It would be wise for you to hire an attorney to review the lease. If you have a tenant representative then they could review the lease with you as well. Commercial 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.
When the end of lease contract negotiations has ended the landlord will give you a draft of the lease to review and sign.
There are many more things to think about when renting commercial property however these tips will help get you going. If you’re a new company renting space for the first time or an existing company who has just leased one or 2 spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you’ll save a great deal of money and time.