Tips For Negotiating The Very Best Contract When Searching For Industrial Space For Lease
Before you begin looking for an excellent good Sonoma wineries for your business, you should to get informed about the commercial property leasing process. Being ready should help prevent you from making impulsive decisions and costly mistakes thatyou will probably regret in the future. The following are some insider tips to help make an informed choice when leasing a commercial property your company
Initiate the process of searching for commercial space at least 6-12 months before your current lease terminates or before your perfect move-in-date. Finding the perfect space and negotiating the deal alonewill require 1-2 months depending upon the size area and current market conditions. Typically the spaces you like will require some type of improvements that the time needed will depend on the scope of work.
Thoroughly research your business’s current and future needs. Consult with the different department heads for input as well as some key employees.
Get familiar with allthe commercial property terms and meanings. Various landlords say and quote things differently. If you’re in doubt about what they mean don’t be afraid to ask them to supply more information.
If you’re not knowledgeable about the commercial rental process or the current market conditions then consider engaging the help of a tenant agent. Their services don’t cost anything since building owners pay all of the rental commissions. The landlord agent will have an professional listing agent advising them so it would be a good idea for you to have one as well.
Physically tour all of the spaces that meet your needs so thatyou can make a brief list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord agents a great deal of questions about the ownership, property amenities, required lease term length, how much the landlord is prepared to give in tenant construction allowances, etc..
Don’t settle for the first commercial properties you think is acceptable for your needs: continue looking until you have at least two to 3 alternative choices. These extra options will work to your benefit 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 discussions for your first choice go sideways.
Send out proposals to your top three to five choices. These are not legally binding. You never want to take a landlord representative’s verbal word. 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. Some of the things you need to consider include the dimensions of the distance, the asking base rental rates, the required lease duration, and the incremental costs (taxes, insurance, maintenance, etc). It is also possible to take note about the advantages and disadvantages of each property. If you’re budget conscious then you can quickly narrow down the list by simply calculating the monthly base rents for each property then eliminating those that 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 expenses then dividing by 12.
If some of the commercial spaces require tenant improvements then it’s important that you figure out what improvements you want on each and get preliminary bids. That way if the landlord is offering a tenant improvement allowance you will learn how much out of pocket you will need to pay above and beyond what the landlord is prepared to give.
Carefully examine and compare the terms of each proposal. Consider whether it makes sense to go back to every landlord to negotiate extra concessions. Make certain you fully understand the total expenses you’re expected to cover. Don’t get emotionally attached to a specific property until the discussions are over. Emotional attachment might result in you signing a contract thatyour business cannot live up to.
After discussions are finalized and you’ve made your selection now it is time to have the landlord provide you the first draft of the commercial lease contract.
Now it is time to reassess the commercial lease contract. It would be wise for you to hire an attorney to review the lease. If you have a tenant agent then they could review the lease with you also. Commercial lease language could be negotiated. If you don’t like certain lease items or would like to propose new language now is the time to do so.
Once the end of lease contract negotiations has finished the landlord will give you a copy of the lease to sign.
There are many more things to think about when leasing commercial real estate however these ideas will help get you started. If you’re a new business leasing space for the first time or an current business who has only rented 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.



