Before you begin looking for a good commercial property rental to rent for your law firm, you should to get informed about the commercial real estate leasing process. Being ready should keep you from making foolish decisions and costly mistakes you will regret in the future. Below are some insider tips to help make an informed choice when letting a commercial real estate your business
Start the process of finding commercial space at least 6-12 months before your current lease terminates or until your perfect move-in-date. Finding the perfect space and negotiating the deal alonewill take 1-2 months depending on the size space and current market conditions. In most cases the spaces you like will need some type of improvements which the time required will depend on the scope of work.
Thoroughly research your company’s present and future needs. Consult with the various department heads for input in addition to some key employees.
Get acquainted with allthe commercial space terms and definitions. Different landlords say and quote things differently. If you are in doubt about what they mean don’t be afraid to ask them to supply more info.
If you are not knowledgeable about the commercial rental process or the present market conditions then consider engaging the support of a tenant rep such as AustinTenantAdvisors. Their services don’t cost anything since building owners compensate all of the rental commissions. The landlord agent will have an experienced 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 you can make a brief list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord representatives a lot of questions regarding 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 properties you think is suitable for your needs: continue looking until you have at least 2 to 3 other options. These additional options will work to your benefit since you will know what to expect during the lease negotiations and you’ll gain more leverage with multiple building owners competing for your business. They also give you something to fall back to if the discussions 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 want to take a landlord representative’s verbal word. Everything should be in writing.
To help you decide what property is most suitable for your business, prepare a spreadsheet to do an apples to apples comparison of every property. A few of the things you should put into consideration include the size of this distance, the inquiring foundation rental rates, the required lease duration, and the incremental expenses (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 simply 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 commercial space square feet from the asking base rate plus any operating expenditures then dividing by 12.
If some of the commercial spaces need tenant improvements then it is important that you figure out what improvements you want on each and get preliminary bids. This way if the landlord is offering a tenant improvement allowance you will learn how much out of pocket you’ll need to pay over and beyond what the landlord is willing to give.
Carefully examine and compare the terms of each proposal. Consider whether it makes sense to return to every landlord to negotiate additional concessions. Be sure you completely 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 result in you signing a contract your business can’t live up to.
After discussions are finalized and you have made your selection now it’s time to have the landlord provide 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. For those who have a tenant agent then they could review the lease with you also. Industrial lease language could be negotiated. If you don’t like particular lease items or would like to propose new language today is the time to do so.
Once the end of lease contract negotiations has ended the landlord will supply you a draft of the lease to review.
There are many more things to think about when leasing commercial real estate however these tips will help get you going. If you are a new business leasing commercial property for the first time or an current business who has just leased 1 or 2 spaces then consider getting help from a tenant agent. Their services do not cost you anything and you’ll save a lot of money and time.