Leasing commercial real estate can seem daunting, but it doesn't have to be. This guide will walk you through every step of the process so you can lease confidently.
We'll start with basics like understanding your needs and evaluating properties, then move on to more complex topics like negotiation and legal considerations. By the end, you'll know everything you need to know to lease the perfect property for your business. Let's get started!
1. Understand your needs
Before you even start looking at properties, it's important to take an honest look at your business and figure out what type of space will best suit it. You'll be leasing this space for several years, so you want to give yourself the best chance of success by picking the right spot!
Ask yourself these questions before you begin searching:
* What is my budget?
* How many people will work in the space?
* Why do I need commercial real estate (what are my goals)?
Use this guide to help you decide which area of town is best for your location. If you're not sure where to begin, try searching for spaces on Loopnet . Their advanced search tool lets you choose exactly what types of properties and locations you're looking for.
2. Evaluate properties
Once you've identified a potential space, it's time to check out the property and decide if it will work for your business.
Here are some things to look out for when evaluating a property:
* Is there enough room?
* How is the parking situation?
* What does the building look like on the outside?
It's important to have an honest conversation with your team about what can be done in each area of the office so everyone has a clear picture of what they'd be working in.
You'll also want to go take photographs or videos of any spots that stick out to you as being amazing! This quick walk through video by We Work shows their leasing process from initial contact to signing the contract to move in. It's a great example of how thorough their process is, and can help give you ideas for your own!
3. Find a broker to represent you
Commercial real estate brokers are incredibly helpful when it comes to leasing space
because they know what properties are available and have relationships with other brokers that could be a good fit for your business.
They're also familiar with different areas of town, so they can recommend spaces that align with your needs. They may charge you a commission on the lease deal, but this will typically save you money in negotiation fees since they'll ask for them instead of you.
Here are some questions to ask potential brokers:
* How long have you been working as a commercial real agent?
* Do you deal with other types of properties or just commercial real estate
?
* What areas do you specialize in and why?
* How many deals did you close last year (both leases and sales)?
* Can I see a list of your current clients and their contact information?
Use this step by step guide to find the right broker for your business.
4. Negotiate the lease
Once you've found a property that meets all your requirements, it's time to negotiate the terms of the lease! This is an important part of the process because there are several different costs associated with leasing that go beyond just how much rent you'll pay each month.
Here are some things to watch out for:
* How will utility costs be handled? Will you be paying for your portion of the total cost as well as a proportionate share of common area costs?
* How long is the term of the lease? You'll want to make sure you have enough time that your business can grow before you need more space, but not so long that it's hard to break if needed.
* How many months notice is required to end the lease early if necessary?
Look over this article for a step by step guide on how to negotiate a commercial lease
.
5. Review and sign all documents
Once you've agreed on terms, it's time to prepare and sign all the paperwork with your broker! It's important to go over each document carefully so there aren't any surprises or misunderstandings down the road.
Here are a few documents you'll probably be asked to review:
* Lease agreement , which is a legally binding document that states all the terms of the lease.
* Sublease agreement , if applicable, which outlines what your company will get from your subtenant and how it will affect the building.
* Tenant improvement allowance letter , if applicable, which details how much money you can spend on remodeling or furnishing your space before moving in.
Use this step by step guide for commercial leases to help guide you through the process!
