Before you start searching for a great commercial office to rent for your law firm,you must to get informed about the commercial property leasing procedure. Being ready should help prevent you from making expeditious decisions and costly mistakes you will come to regret in the future. Below are some insider suggestions to help make an informed choice when letting a commercial space your company
Initiate the process of hunting commercial space at least 6-12 months before your existing lease expires or before your perfect move-in-date. Finding the right space and negotiating the deal alonewill take 1-2 months depending upon the size area and current market conditions. In most cases the spaces you like will require some type of improvements that the time required will depend on the scope of work.
Thoroughly research your business’s current and future needs. Consult with the various department heads for input as well as some key employees.
Get acquainted with allthe commercial space 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 supply more information.
If you’re not familiar with the commercial real estate leasing process or the current market conditions then consider engaging the help of a tenant agent such as Austin Tenant Advisors. Their services do not cost anything because building owners pay all the rental commissions. The landlord representative will have an expert listing agent helping them so it would be a great idea for you to have one as well.
Physically tour all the properties that meet your requirements so you can make a short list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord reps a great deal of questions regarding who owns the property,property amenities,required lease term length,how much the landlord is willing to give in tenant improvement allowances,etc..
Don’t settle for the first commercial space you think is suitable for your requirements: continue searching until you have at least two to three alternative options. These extra options will work to your advantage since you will know what to expect during 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 if the negotiations to your first choice go silent.
Send out proposals to your top three to five options. These aren’t legally binding. You never need to have 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 every property. A few of the things you should put into consideration include the size of this space,the inquiring base rental rates,the required lease term,and the incremental costs (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 eliminating those which are way above your budget. The monthly base rent is calculated by multiplying the commercial space square feet by the asking base rate plus any operating expenditures then dividing by 12.
If any of the commercial property require finish out then it is important that you determine what improvements you want on each and get construction bids. This way if the building owner is offering a construction allowance you will learn how much out of pocket you will have to pay above and beyond what the building owner is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to return to every landlord to negotiate extra concessions. Be certain you completely understand the total expenses you’re expected to cover. Don’t get emotionally attached to a certain property until the negotiations are over. Emotional attachment might lead to you signing a contract your business cannot live up to.
After negotiations are finalized and you’ve made your selection now it is time to have the landlord provide you the first draft of this commercial rental contract.
Now it is time to review 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 can review the lease with you also. Commercial lease language can 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 ended the building owner will provide you a draft of the lease to review and sign.
There are several more things to think about when renting commercial property however these tips will help get you going. If you’re a new business renting commercial space for the first time or an existing business who has just leased one or two spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you will save a great deal of time and money.