Before you start looking for the perfect commercial space to lease for your law firm,you will need to get educated about the commercial real estate leasing procedure. Being ready will keep you from making rapid decisions and costly mistakes thatyou will come to regret in the future. The following are some insider suggestions to help make an informed decision when renting a commercial office space your business
Initiate the process of searching commercial space at least 6-12 months before your current lease expires or before your ideal move-in-date. Finding the correct space and negotiating the deal will take 1-2 months depending on the size space and current market conditions. In most cases the spaces you like will require some type of improvements that the time needed will depend on the scope of work.
completely analyze your company’s current and future needs. Consult with the various department heads for input in addition to some key employees.
Get familiar with the commercial real estate terms and definitions. Various landlords say and quote things otherwise. If you’re in doubt about what they mean do not be afraid to ask them to get more information.
If you’re not knowledgeable about the commercial rental process or the current market conditions then consider engaging the support of a tenant rep such as Austin Tenant Advisors. Their services do not cost you anything since landlords pay all of the leasing commissions. The landlord agent will have an experienced listing agent helping them so it would be a good idea for you to have one as well.
Personally tour all of the spaces 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 representatives a great deal of questions about who owns the property,property amenities,required lease term length,how much the landlord is prepared to give in tenant construction allowances,etc..
Do not settle for the first commercial properties you believe is suitable for your needs: continue searching until you have at least two to three other options. These additional options will work to your advantage since you will know what to expect during the lease negotiations and you will gain more leverage with multiple landlords competing for your company. They also give you something to fall back to if the discussions to your first choice fall through.
Send out proposals to your top three to five options. These are not legally binding. You never want to have a landlord agent’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. A few of the things you should put into consideration include the dimensions of this distance,the asking foundation rental rates,the required lease term,and the incremental expenses (taxes,insurance,maintenance,etc). You can also take note about the advantages and disadvantages of each property. If you’re budget conscious then you can quickly narrow down the list by calculating the monthly base rents for each property then removing those that are way above your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate and any operating expenditures then dividing by 12.
If some of the commercial buildings require tenant improvements then it is critical that you figure out what improvements you want on each and get construction bids. That way if the landlord is offering a tenant improvement allowance you will learn just how much out of pocket you will need to pay above and beyond what the landlord is prepared to give.
Carefully analyze 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 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’ve made your selection now it’s time to have the landlord offer you the first draft of this commercial rental contract.
Now it’s time to reassess 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 could review the lease with you as well. Commercial lease language could be negotiated. If you do not like particular lease items or want to propose new language now is the time to do so.
When the end of rental contract negotiations has ended the landlord will provide you a draft of the lease to sign.
There are several more things to think about when renting commercial real estate however these tips will help get you started. If you’re a new business renting commercial space for the first time or an current business who has just leased 1 or two spaces then consider getting help from a tenant agent. Their services do not cost you anything and you will save a great deal of money and time.