Before you begin looking for the perfect commercial property for lease for your law firm,you should to get educated about the commercial space leasing process. Being ready will prevent you from making hasty decisions and costly mistakes you will end up regretting later on. The following are some insider tips to help make an informed choice when renting a commercial space your business
Initiate the process of hunting commercial space at least 6-12 months before your existing lease expires or until your ideal move-in-date. Finding the correct space and negotiating the deal will require 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 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 as well as some key employees.
Get familiar with allthe commercial property terms and meanings. Different landlords state and quote things otherwise. If you are in doubt about what they mean do not be afraid to ask them to provide more info.
If you are not knowledgeable about the commercial property leasing process or the present market conditions then consider engaging the support of a tenant agent such as AustinTenantAdvisors. Their services do not cost anything because building owners pay all the leasing commissions. The landlord rep will have an expert listing agent representing them so it would be a great idea for you to have one also.
Personally see all the properties that meet your needs so you can make a short list. Keep in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord representatives a great deal of questions about the ownership,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 think is acceptable for your needs: continue searching until you have at least 2 to 3 alternative options. These additional options will work to your advantage because you will know what to expect during the lease negotiations and you’ll gain more leverage with numerous 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 want to take a landlord agent’s verbal note. Everything needs to 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 need to put into consideration include the dimensions of the distance,the asking base rental rates,the necessary lease term,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 calculating the monthly base rents for each property then eliminating those which are way over your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate plus any operating expenses then dividing by 12.
If some of the commercial spaces need tenant finish-outs then it’s crucial 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 is logical to go back to each landlord to negotiate additional concessions. Make certain you fully understand the total expenses you are expected to cover. Do not get emotionally attached to a certain property until the negotiations are over. Emotional attachment might lead to you signing a contract your business can’t live up to.
After negotiations are finalized and you have made your selection now it is time to have the landlord provide you the first draft of the commercial rental contract.
Now it is time to review the commercial rental 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 do not like particular lease items or would like 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 copy of the lease to sign.
There are many more things to think about when renting commercial real estate however these ideas will help get you started. If you are a new business renting commercial property for the first time or an existing business who has just leased one or 2 spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you’ll save a lot of money and time.