Before you start looking for a good business space to lease for your startup,you will need to get informed about the commercial property leasing process. Being ready will keep you from making foolish decisions and costly mistakes you will end up regretting in the future. The following are some insider suggestions to help make an informed choice when renting a commercial real estate your business
Initiate the process of finding commercial space at least 6-12 months before your current lease expires or until your perfect move-in-date. Locating the perfect 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 need some type of improvements that the time needed will depend on the scope of work.
completely examine your company’s present and future needs. Consult with the various department heads for input as well as some key employees.
Get acquainted with the commercial property terms and meanings. Different landlords state and quote things differently. If you are in doubt about what they mean do not be afraid to ask them to supply more info.
If you are not knowledgeable about the commercial property leasing process or the present market conditions then consider engaging the assistance of a tenant rep such as Austin Tenant Advisors. Their services do not cost you anything since landlords pay all the leasing commissions. The landlord rep will have an knowledgable listing agent advising them so it would be a great idea for you to have one also.
Personally visit all the properties that meet your requirements so you can make a brief list. Keep in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord agents a great deal of questions about who owns the property,property amenities,required lease term length,how much the landlord is willing to give in tenant construction allowances,etc..
Don’t settle for the first commercial space you think is acceptable for your requirements: continue searching 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 will gain more leverage with numerous landlords competing for your company. They also give you something to fall back to whether the negotiations for your first choice go silent.
Send out proposals to your top three to five options. These aren’t legally binding. You don’t ever want to take a landlord representative’s verbal word. 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 every property. Some of the things you need to put into consideration include the dimensions of the distance,the inquiring base rental rates,the required lease term,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 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 over your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate plus any operating expenditures then dividing by 12.
If any of the commercial spaces need reconfiguring then it’s important that you figure out what improvements you want on each and get preliminary bids. This way if the building owner is offering a tenant improvement allowance you will know how much out of pocket you will need to pay over and beyond what the building owner is willing to give.
Carefully examine and compare the terms of each proposal. Consider whether it is logical to return to every landlord to negotiate additional concessions. Make sure you completely understand the total expenses you are expected to cover. Don’t get emotionally attached to a certain property until the negotiations are over. Emotional attachment might result in you signing a contract your business can’t 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. For those who have a tenant agent then they could review the lease with you as well. Industrial lease language could be negotiated. If you do not like particular lease items or would like to propose new language now is the time to do so.
When the end of rental contract negotiations has finished the building owner will supply you a draft of the lease to sign.
There are many more things to consider when renting commercial property however these ideas will help get you going. If you are a new business renting space for the first time or an current business who has only rented 1 or 2 spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you will save a great deal of money and time.