Now you’re ready to move on to the next stage of your business expansion. And that is taking on a commercial space. Although it is exciting, searching for the perfect space for your business can be an overwhelming task. That’s why we have some tips for you so you can avoid those bad leases.
- Don’t rush!
Because of pressure or too much excitement, you might end up choosing the wrong commercial space for your business. Take all the necessary time you need to plan things out carefully and avoid settling for a less-than-optimal commercial space just to get the task over with. Finding the perfect space for your business can be time-consuming and stressful. Embrace that fact from the beginning, and you’ll be fine. The more careful you are during the process, the less problematic it will be.
- Find a reliable real estate agent
With the help of an experienced commercial real estate agent, your search for the perfect space can become a lot easier. Your specialized agent should also be able to advise you on the lease negotiations, tell you the pros and cons of a deal and provide you with detailed analyses on certain legal documents.
- Negotiate
Remember: DO NOT accept the landlord’s first tenant term. Negotiate from a place of strength. Come to terms about a reasonable price. Negotiate for other concessions, such as facility costs, hidden costs, and TMIs. Be willing to withdraw if your terms are not met.
- Seek advice from a dependable lawyer
Never sign a property lease contract until the document has been scrutinized, approved, and consented to by your lawyer. Signing a wrong contract can cause enormous losses. Know your rights as well as your responsibilities indicated in the contract.
- Discuss exclusivity in your building
Make sure to talk to the landlord about exclusivity in your building or complex. If you are, for example, running a pet shop, there should be no other pet shops allowed to open in your building. If it’s a restaurant you are opening, make sure there will be no direct competition to your cuisine. Clear and open communication with your landlord is the key.
- Discuss the tenant improvement allowance
Negotiating a tenant improvement allowance with the landlord is a crucial part of the process. Even before you approach the landlord, you need to first have a clear understanding of your requirements for the space in terms of layout, design, functionality, and any upgrades needed. And you have to communicate this effectively with the landlord.
- Talk to construction experts
Make sure to consult with a contractor to assess the site for utility provisions. Assess the current condition of the site that may affect construction cost.
- Do your homework
Remember to check out as many properties as possible and be willing to be open-minded. Study the local real estate market so that you can have a rough idea of what a fair commercial rental rate looks like in your chosen area or location. Always ask for expert advice before making major decisions.
