Before you begin looking for an excellent commercial property to rent for your software company, you will need to get educated about the commercial property leasing process. Being ready should help prevent you from making hurried decisions and costly mistakes you will probably regret later on. The following are some insider tips to help make an informed choice when renting a commercial property your company
Start the process of locating commercial real estate for lease at least 6-12 months before your existing lease terminates or until your ideal move-in-date. Locating 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 tenant improvements which the time needed will depend on the scope of work.
completely analyze your company’s present and future needs. Consult with the different department heads for input in addition to some key employees.
Get acquainted with allthe commercial property terms and meanings. Different landlords say and quote things differently. If you are in doubt about what they mean do not be afraid to ask them to supply more information.
If you are not familiar with the commercial real estate leasing process or the present market conditions then consider engaging the help of a tenant representative such as Austin Tenant Advisors. Their services do not cost anything since building owners pay all of the rental commissions. The landlord representative will have an expert listing agent helping them so it would be a good idea for you to have one too.
Personally visit all of the properties that meet your requirements so you can make a brief list. Keep in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord representatives a great deal of questions about who owns the property, property amenities, required lease term length, how much the landlord is prepared to give in tenant improvement allowances, etc..
Don’t settle for the first commercial properties you think is acceptable for your requirements: continue looking until you have at least two to 3 other options. These additional options will work to your advantage because you will know what to expect during the lease negotiations and you will gain more leverage with numerous building owners competing for your business. They also give you something to fall back to whether the discussions for your first choice go silent.
Send out proposals to your top three to five options. These are not legally binding. You never need to have 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 inquiring foundation rental rates, the required lease term, and the incremental costs (taxes, insurance, maintenance, etc). It is also possible to take note about the pros and cons of each property. If you are budget conscious then you can quickly narrow down the list by simply calculating the monthly base rents for each property then eliminating those which are way above your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate plus any operating expenditures then dividing by 12.
If any 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. This way if the landlord is offering a tenant improvement allowance you will know how much out of pocket you will have to pay above and beyond what the landlord is prepared to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to return to every landlord to negotiate extra concessions. Be certain you fully understand the total expenses you are 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 your business can’t live up to.
After discussions are finalized and you have made your selection now it is time to have the landlord offer you the first draft of the commercial lease contract.
Now it is 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 representative then they can review the lease with you as well. Industrial lease language can be negotiated. If you do not like certain lease items or would like to propose new language today is the time to do so.
When the end of lease contract negotiations has ended the landlord will give you a copy of the lease to sign.
There are several more things to think about when renting commercial space however these suggestions will help get you going. If you are a new business renting space for the first time or an existing business who has only rented one or two spaces then consider getting help from a tenant representative. Their services do not cost you anything and you will save a great deal of money and time.