Many companies look at leasing commercial real estate as being a lower risk than purchasing property, as there are fewer worries about depreciation, taking on debt and other concerns when you're using space without buying it. While it may be true that choosing to lease your office space or building spares you from certain worries, there are still risks involved. To help ensure that you choose the best office space and get the best possible leasing agreement, be sure to avoid these all-too-common deadly commercial real estate mistakes.
Going in Blind
You would never dream of purchasing commercial real estate in an area without looking into the market. After all, you want to make sure that you're paying a fair price and buying real estate that will have a high value in the future due to a prime location.
Even though most people understand the importance of market research when buying commercial real estate, a shocking number of companies fail to do their homework and learn about the market trends when they're leasing. If you don't do some legwork and learn about the area, you'll have no idea what rent per square foot is fair, what amenities are common and what companies are located nearby that could help or hurt your business.
Acting All on Your Own
Many companies choose to search for properties and negotiate with landlords all on their own and end up with commercial real estate leases that are overpriced or properties that don't fully meet their needs as a result. Enlisting the help of an unbiased tenant rep broker can help ensure that you get a fair lease agreement from your landlord. Brokers are also very skilled at helping companies find spaces that aren't just acceptable, but are instead the exact right fit for their needs.
Not Considering the Future
When you're searching for commercial real estate spaces to lease, you can't afford to be nearsighted. While you want to find a space that will meet your immediate needs, it's important that you also consider changes that could occur within the time period of your lease and how they might affect your needs for space. If you foresee an expansion or reorganization in the not-so-distant future, you'll want to ensure that the space you choose will be able to accommodate you.
Failing to Discuss Lease Terms
Lease agreements are long and complicated, but never make the mistake of signing one without fully reading and discussing the terms. If you don't understand the language, ask questions and make sure you're fully confident that you know what you're getting into before you put the pen to the paper.
Waiting Too Long to Search
Many companies underestimate the amount of time that it will take to find the right commercial office space for their needs. Don't wait until your current lease is just weeks from expiring. Start early, so you have plenty of time to research the market and negotiate with your prospective landlord.
Focusing Only on Price
While it's important to find an office space that fits your budget, focusing only on price could be a recipe for disaster. You need to be aware of what you're getting for the cost in terms of amenities and square footage per dollar. It's also important to consider what the costs will be to modify the space and ensure that it's ready for you to move in.
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