Before you begin searching for an excellent wineries near Sonoma for your startup company, you should to get educated about the commercial property leasing process. Being ready will keep you from making hasty decisions and costly mistakes thatyou will regret in the future. Below are some insider tips to help make an informed choice when renting a commercial real estate your company
Initiate the process of searching for commercial space at least 6-12 months before your existing lease terminates or until your perfect move-in-date. Finding the perfect space and negotiating the deal alonewill take 1-2 months depending on the size area and current market conditions. In most cases the spaces you like will need some type of modifications which the time required will depend on the scope of work.
Thoroughly research your business’s present and future needs. Consult with the various department heads for input in addition to some key employees.
Get acquainted with the commercial real estate terms and definitions. Different 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 info.
If you’re not knowledgeable about the commercial property leasing process or the present market conditions then consider engaging the assistance of a tenant representative. Their services don’t cost anything because landlords pay all of the leasing fees. The landlord agent will have an professional listing agent representing them so it would be a good idea for you to have one as well.
Physically see all of the properties 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 lot of questions regarding who owns the property, property amenities, required lease term length, how much the landlord is willing to give in tenant improvement allowances, etc..
Don’t settle for the first commercial properties you believe is acceptable for your needs: continue searching until you have at least two to three alternative choices. These additional options will work to your advantage because you will know what to expect throughout the lease negotiations and you will gain more leverage with multiple landlords 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 need to have a landlord representative’s verbal note. 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 each property. A few of the things you should put into consideration include the dimensions of this space, the asking base rental rates, the required lease term, and the incremental expenses (taxes, insurance, maintenance, etc). You can also take note about the pros and cons of each property. If you’re budget conscious then you can quickly narrow down the list by 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 from the asking base rate and any operating expenses then dividing by 12.
If some of the commercial properties need changes then it is important that you determine what changes you want on each and get construction bids. This way if the building owner is offering a construction allowance you will learn how much out of pocket you will have to pay above and beyond what the building owner is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it makes sense to go back to each landlord to negotiate extra concessions. Be 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 can’t 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 this commercial rental contract.
Now it is time to reassess the commercial rental contract. It would be wise for you to hire an attorney to review the lease. For those who have a tenant agent then they can review the lease with you as well. Commercial lease language can be negotiated. If you don’t like particular lease items or want to propose new language now is the time to do so.
Once the end of rental contract negotiations has finished the building owner will give you a draft of the lease to review.
There are several more things to consider when leasing commercial space however these tips will help get you going. If you’re a new business leasing commercial space for the first time or an existing business who has only rented 1 or two spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you will save a lot of time and money.