Guest blog by Scott Mathews. Scott is a real estate agent and a blogger at the paper writer service. Scott has more than 10 years of experience in commercial real estate, so he enjoys sharing interesting ideas with online followers. This is also why he occasionally creates articles for essay writer service and assignment service UK as well. Besides that, Scott is a father of three kids and spends most of his leisure time playing with his youngest baby, James.
Commercial real estate is one of the largest markets globally. According to the report, the value of private office construction starts in the United States alone amounted to $6.2 billion in 2018. The reason why this industry is so huge is obvious: every company needs its offices.
But the sheer quantity of supply doesn’t mean you can find a perfect property quickly and easily. First of all, the demand is high as well, so any building larger than 10,000 square feet that hits the market generally goes under contract within six months.
Secondly, available properties are not always ideal. You have to be very careful when choosing a place to work at, paying attention even to the smallest details. This article will show you 10 commercial real estate concerns you should know.
1. Choose Location Carefully
When you think about leasing property, the first thing you want to consider is location. Namely, you should find a place that you and your team can easily get to without wasting hours commuting or waiting in the traffic jam every day. Of course, you probably can’t find a building that’s 15 minutes away from everyone, but try to make it accessible and well-connected with the major transportation lines.
2. Find a Comfortable Place
We know that larger premises mean higher rent, but you will make a mistake if you pick smaller offices just to cut operational costs. A dozen square feet more will do miracles in terms of comfort and coziness for your employees. Real estate analysts at Resumes Planet explain the second solution: “On the other side, choosing a building where everyone feels stuck will only harm your business long-term. How come? The reason is simple - people won’t enjoy their positions, the result of which will be underperformance.”
3. Don’t Buy a Property if You’re Just Starting
Another mistake that business owners make very often is buying a property for the newly-founded companies. We respect your wish to provide the best conditions for your team but try not to rush into things. Since you are at the very beginning of your business, it’s probably better to rent a property and invest more money in product placement, marketing, and customer relationship service. It will help your company grow quickly and then you can consider buying your own premises.
4. Square Footage Issues
Here’s another problem we get to see quite frequently: the way landlords measure square footage can sometimes be very problematic. Make sure you understand the difference between useable square footage and rentable square footage, and know what you are paying for.
5. Tenant Improvement Allowance
A tenant improvement allowance (TIA) represents the funds a landlord has to invest in office reconstruction or improvements. This is where you need to be very precise and make a detailed list of specifications, explaining where TIA money can be spent. Don’t expect a landlord to buy you furniture or decorations, but you definitely want him to pay for the hard costs like new doors, walls, framing, and similar investments.
6. Common Area Maintenance
Common Area Maintenance (CAM) is another important detail to consider before leasing commercial space. This fee is charged on a pro-rata basis, which means you need to pay more if you rent more space. However, we strongly encourage you to negotiate a flat CAM instead of variable fees. It will help you avoid unexpected costs and allow you to plan the annual lease budget to the smallest details.
7. Hire a Broker
With everything you’ve read so far, you probably understand that finding a commercial space for your company is a multivariable business. In such circumstances, you shouldn’t do it on your own, but rather hire a professional. Bloggers at Xpertwriters.com who often write about commercial real estate claim there are many reasons to hire a broker: “Two reasons are crucial – you want someone to do it quickly and professionally. This is something you can never achieve on your own.”
8. Go for the Long-Term Lease
Renting a place short-term can be very annoying. First of all, you will have to move the entire organization frequently, which is never an easy thing to do. And secondly, a short-term lease gives you much less negotiation power. Tenants who agree to stay in one place for a longer period of time can drastically reduce the rent, but also negotiate better TIA conditions and CAM costs.
9. Ask About the Prior Uses of the Property
Here comes a highly practical suggestion – ask about the prior uses of the property. Why would you do that? Well, the goal is to prevent any kind of aftermath. For instance, the place may have been used for car repair purposes, while you want to open a pharmacy. The two concepts don’t fit together, so you better find a more convenient place.
10. Think About Timing
The last tip on our list is highly practical. You need to consider timing because it takes a while before you can actually move in after leasing a commercial space. Grade Miners review services claim a company needs at least 3 to 4 weeks to move in because that’s how much it takes to sign a contract, move out of the old premises, and switch to the new building.
If you are searching for a place to rent for business purposes, you need to be cautious and choose the property wisely. From square footage to tenant improvement costs, there are all sorts of details you must pay attention to.
In this post, we explained 10 commercial real estate concerns you should be aware of. These are simple but very painful issues, so make sure to remember our suggestions and pick the perfect place for your company!
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