Before you start looking for a good commercial office to lease for your startup, you will need to get educated about the commercial office leasing process. Being prepared will prevent you from making expeditious decisions and costly mistakes you will probably regret in the future. Below are some insider suggestions to help make an informed decision when letting a commercial space your business
Start the process of searching for commercial space at least 6-12 months before your current lease expires or before your ideal move-in-date. Locating the correct space and negotiating the deal will take 1-2 months depending upon the size space and current market conditions. Typically the spaces you like will need some type of changes which the time required will depend on the scope of work.
completely examine 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 property terms and definitions. Various landlords state and quote things otherwise. If you are in doubt about what they mean do not be afraid to ask them to get more information.
If you are not familiar with the commercial property leasing process or the present market conditions then consider engaging the support of a tenant representative such as AustinTenantAdvisors. Their services do not cost anything because building owners pay all the leasing commissions. The landlord rep will have an knowledgable listing agent representing them so it would be a great idea for you to have one as well.
Personally see all the properties that meet your requirements so you can make a brief list. Bear in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord representatives a lot 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 space you believe is acceptable for your requirements: continue looking until you have at least two to three other options. These extra 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 building owners competing for your tenancy. They also give you something to fall back to whether the negotiations for your first choice fall through.
Send out proposals to your top three to five options. These are not legally binding. You never want to take a landlord agent’s verbal note. Everything needs to 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 need to put into consideration include the size of this space, the inquiring foundation rental rates, the necessary lease term, and the incremental expenses (taxes, insurance, maintenance, etc). It is also possible to take note about the advantages and disadvantages 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 above your budget. The monthly base rent is calculated by multiplying the commercial space square feet from the asking base rate plus any operating expenses then dividing by 12.
If any of the commercial property need reconfiguring then it is important that you determine what changes you want on each and get preliminary bids. That way if the building owner is offering a tenant improvement allowance you will learn just how much out of pocket you will have to pay above and beyond what the building owner is prepared to give.
Carefully analyze 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. Do not get emotionally attached to a specific property until the negotiations are over. Emotional attachment might result in you signing a contract your business cannot 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 this commercial lease contract.
Now it is time to reassess the commercial lease contract. It would be advisable for you to hire an attorney to review the lease. For those who have a tenant representative 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 want to propose new language now is the time to do so.
When the end of lease contract negotiations has ended the building owner will provide you a copy of the lease to review and sign.
There are many more things to think about when renting commercial space 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 just leased one or two spaces then consider getting help from a tenant rep. Their services do not cost you anything and you will save a lot of money and time.