Before you begin searching for an excellent Sonoma wine tasting for your company, you will need to get educated about the commercial warehouse leasing procedure. Being prepared should help prevent you from making expeditious decisions and costly mistakes thatyou will come to regret later on. Below are some insider tips to help make an informed decision when renting a commercial space your business
Start the process of hunting for commercial space 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 will take 1-2 months depending upon the size space and current market conditions. In most cases the spaces you like will need some sort of changes that the time required will depend on the scope of work.
completely analyze your company’s current and future needs. Consult with the different department heads for input as well as some key employees.
Get familiar with the commercial real estate terms and meanings. Different landlords say and quote things otherwise. If you’re unsure about what they mean don’t be afraid to ask them to supply more information.
If you’re not familiar with the commercial real estate leasing process or the current market conditions then consider engaging the support of a tenant agent. Their services don’t cost you anything because landlords compensate all the rental fees. The landlord agent will have an professional listing agent advising them so it would be a great idea for you to have one too.
Personally tour all the properties that meet your needs so thatyou can make a short list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord reps 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 construction allowances, etc..
Do not settle for the first commercial space you believe is acceptable for your needs: continue searching until you have at least 2 to three alternative options. These additional options will work to your benefit since you will know what to expect throughout the lease negotiations and you’ll gain more leverage with numerous landlords competing for your company. They also give you something to fall back to if the negotiations for your first choice go silent.
Send out proposals to your top three to five options. These aren’t legally binding. You never need to have a landlord representative’s verbal note. Everything should 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 consider include the dimensions of the distance, the asking foundation rental rates, the required 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 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 expenditures then dividing by 12.
If any of the commercial spaces need tenant improvements then it’s 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 learn just how much out of pocket you’ll 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. Make sure 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 the commercial rental contract.
Now it’s time to review the commercial rental contract. It would be advisable for you to hire an attorney to review the lease. If you have a tenant representative then they can review the lease with you also. Commercial lease language can 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 finished the landlord will supply you a draft of the lease to review and sign.
There are several more things to think about when leasing commercial space however these tips will help get you going. If you’re a new company leasing space for the first time or an current company who has just rented one or 2 spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you’ll save a great deal of time and money.