Before you start searching for the perfect commercial property rental for rent for your startup company,you will need to get informed about the commercial property leasing procedure. Being prepared will keep you from making hasty decisions and costly mistakes thatyou will end up regretting later on. The following are some insider suggestions to help make an informed decision when renting a commercial space your business
Start the process of locating commercial space for lease at least 6-12 months before your current lease terminates or until your perfect move-in-date. Finding the right space and negotiating the deal alonewill take 1-2 months depending upon the size area and current market conditions. In most cases the spaces you like will require some sort of modifications that the time needed will depend on the scope of work.
completely research your business’s present and future needs. Consult with the various department heads for input as well as some key employees.
Get acquainted with the commercial real estate terms and meanings. Different landlords state and quote things otherwise. If you are unsure about what they mean don’t be afraid to ask them to provide more information.
If you are not familiar with the commercial rental process or the present market conditions then consider engaging the assistance of a tenant representative such as Austin Tenant Advisors. Their services don’t cost anything since landlords pay all of the leasing fees. The landlord rep will have an knowledgable listing agent helping them so it would be a good idea for you to have one also.
Physically tour all of the spaces that meet your needs 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 about the ownership,property amenities,required lease duration,how much the landlord is willing to give in tenant improvement allowances,etc..
Don’t settle for the first commercial space you believe is suitable for your needs: continue searching until you have at least two 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 will gain more leverage with numerous landlords competing for your tenancy. 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 options. These are not legally binding. You don’t ever want to have a landlord representative’s verbal note. Everything should 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 each property. Some of the things you should consider include the size of this space,the asking foundation rental rates,the necessary lease term,and the incremental costs (taxes,insurance,maintenance,etc). You can also take note about the pros and cons of each property. If you are 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 industrial space square feet from the asking base rate and any operating expenditures then dividing by 12.
If some of the commercial properties 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 learn how much out of pocket you will need to pay above and beyond what the landlord is willing 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. Make certain you fully understand the total expenses you are expected to cover. Don’t 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 have made your selection now it is time to have the landlord provide you the first draft of this commercial lease contract.
Now it is 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 can review the lease with you as well. Commercial 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 lease contract negotiations has ended the building owner will give you a draft of the lease to review and sign.
There are many more things to consider when leasing commercial space however these tips will help get you going. If you are a new business leasing space for the first time or an current business who has just rented one or two spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you will save a great deal of time and money.