Finest Tips For Negotiating Industrial Space For Lease

Before you start looking for a good for your startup company, you must to get informed about the commercial property leasing process. Being prepared will help prevent you from making hasty decisions and costly mistakes you will end up regretting later on. The following are some insider suggestions to help make an informed choice when leasing a commercial real estate your business

Initiate the process of searching for commercial space at least 6-12 months before your existing lease expires or before your ideal move-in-date. Finding the correct space and negotiating the deal alonewill take 1-2 months depending upon the size space and current market conditions. In most cases the spaces you like will require some type of modifications which the time needed will depend on the scope of work.

completely examine your company’s current 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 meanings. Various landlords say and quote things differently. If you’re unsure about what they mean do not be afraid to ask them to get more info.

If you’re not knowledgeable about the commercial real estate leasing process or the current market conditions then consider engaging the support of a tenant representative. Their services do not cost you anything because landlords pay all the rental fees. The landlord rep will have an experienced listing agent helping them so it would be a great idea for you to have one too.

Physically see all the properties that meet your requirements so you can make a short list. Keep in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord agents a lot of questions about 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 space you believe is suitable for your requirements: continue searching until you have at least 2 to three other choices. These extra options will work to your advantage because you will know what to expect throughout the lease negotiations and you will gain more leverage with multiple landlords competing for your business. They also give you something to fall back to if the negotiations for your first choice go silent.

Send out proposals to your top three to five choices. These are not legally binding. You don’t ever need to have a landlord representative’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 every property. A few of the things you should consider include the size of this space, the inquiring foundation rental rates, the necessary lease duration, and the incremental expenses (taxes, insurance, maintenance, etc). It is also possible to take note about the pros and cons 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 over your budget. The monthly base rent is calculated by multiplying the commercial space square feet from the asking base rate and any operating expenses then dividing by 12.

If any of the commercial spaces require changes then it is important that you figure out what improvements you want on each and get prelim construction bids. That way if the landlord is offering a finish out allowance you will know how much out of pocket you will need to pay over and beyond what the landlord is willing to give.

Carefully analyze and compare the terms of each proposal. Consider whether it is logical to go back to every landlord to negotiate additional concessions. Be sure you completely understand the total expenses you’re expected to cover. Don’t 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’s time to have the landlord provide you the first draft of this commercial lease contract.

Now it’s time to review the commercial lease contract. It would be advisable for you to hire an attorney to review the lease. If you have a tenant agent then they can review the lease with you also. Commercial lease language can be negotiated. If you do not like certain lease items or would like to propose new language now is the time to do so.

When the end of lease contract negotiations has ended the landlord will supply you a draft of the lease to review and sign.

There are several more things to consider when renting commercial real estate however these ideas will help get you started. If you’re a new business renting commercial property for the first time or an existing business who has only rented 1 or 2 spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you will save a great deal of money and time.