In my first blog, I asked, “Are you content with your current office or industrial space?”
“No, I’m not,” she chuckles over a voicemail, “so, I’m looking for office space rather soon.”
She wants to keep it simple and lease space, and that’s a great option for many businesses. It’s important to find the perfect space with the right lease terms to match your needs. Here are my five tips to get the right deal for your business:
1. Arm yourself with knowledge and enlist the help of a commercial real estate broker. Having a broker on your team gives you a leg up when trying to find the right property, especially during lease negotiations. We are experts in the process and know market conditions. We also know current concessions landlords in your market are willing to give. It’s a win-win for you.
2. Be aware of the clock. Start early, as finding the right space and the leasing process takes time. Also, be sure to respond to options, proposals, and draft leases right away as to not slow down the process. Finally, give yourself plenty of time to thoroughly review the draft lease agreement to be sure you are not missing anything, as you might do when responding on the fly.
3. Prioritize your wish list to help your broker better negotiate. Knowing what you are willing to give and what is a hard line before negotiations begin, will make the process much smoother.
4. Double check all details and make a list of tenant improvements if needed. Details include those in the lease and at the property. Are the space measurements correct? Does the usable space you calculate match what is quoted? Do you see things at the property that need to be fixed or adjusted to meet your needs? Having that list for negotiations is critical.
5. Give yourself flexibility for the future. Five- to seven-year deals are typical, but if the space looks good and only needs paint and carpet, maybe you can get a three-year deal done with a renewal option. Most landlords do not like options as they are a one-way street––good for the tenant, but not so good for the landlord. However, always ask even if you don’t think you will be there in a few years. Markets can change quickly, like they are now.
Using a tenant broker, someone who advocates for you, is a cost-effective way for you to get the most out of the leasing process. Fees are typically covered by landlords, and brokers help you navigate the process and make more informed decisions. It’s important and beneficial for you to have a knowledgeable advocate on your team.
Jeff Salzbrun is the owner and broker of Commercial Equities Group (CEG). As a veteran-owned real estate brokerage, CEG has been involved in many sale and lease transactions, ranging from single offices to 250,000+ square foot buildings. At CEG, we get your deal done. We know space, and we know the CRE business.
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