When you are planning to move to a new space, it is essential that you pay attention to the lease document before signing it. In this article, we are going to explore the four important things to know before signing a commercial office lease.
1. Ask the Right Questions
Asking the right questions will help you avoid paying high monthly rent and utility costs. Important questions to ask before signing a commercial lease include:
What type of lease is given? There are various types of commercial real estate lease, and it is important that you identify the type you are given; so, you can understand your obligations under it. Commercial lease types include gross lease, net lease, triple net and absolute triple net.
Is the space modifiable? Business needs changes with time. Hence, if you are in an industry that requires modifying your existing workspace to accommodate new staffs, equipment or layout, you may need to ensure that your space is modifiable.
Are the terms of the lease negotiable? Having a negotiable lease terms means that your landlord is flexible. This is a good sign that you are going to get along with the landlord.
2. Check Out All the Facilities
Examine your entire building to ensure that it gives a good first impression. Your clients and visitors will have access to other facilities in the building, and ensuring that the public bathrooms, cafes, lobbies and waiting areas located in the building are in peak condition will help in creating a good first impression. When checking out the facilities, focus on cleanliness, attractiveness, and accessibility.
3. Get Acquainted with the Neighbors
Before signing the lease, it is good to take a few minutes to peruse the tenant listing for your building. This is important for many reasons. Firstly, you will be able to keep an eye out for competitors who may be in close proximity. In addition, it will also help you to know your neighbors who are on your floor or close to your floor; for, their activities can affect your business. Finally, it is also a good chance to find out how satisfied tenants are with the landlord.
4. Set a Reminder
When you sign a lease, check out the terms and conditions for the renewal process. In some cases, you may be required to inform the landlord if you want to remain in your office space when the agreed lease expires. In other cases, you may refuse or the lease automatically renews. Either way, you may be required to communicate with your landlord by a date specified in the lease. Once you have signed the lease, kindly set a reminder for a few months to begin reviewing your options. This will help you to be in a good position to negotiate for a good deal.
5. Use a Tenant Rep Broker
Finally, it is essential to use the service of a tenant rep broker. Commercial real estate is complex and lease agreements are filled with a whole new lexicon of complicated terms. You need a tenant rep broker to help you fully interpret these terms, so they are at your advantage. In addition, tenant rep brokers have a solid understanding of the commercial real estate market, and they can help you find the best office for your business needs. Usually, these offices are often snatched up before they are announced. Finally, hiring a tenant rep broker won’t make your deal more expensive; the landlord covers their cost of service.
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