Jul 22, 2019 8:31:00 AM

How Important is Building Condition When Leasing a Commercial Space?

By Holly Welles

How Important is Building Condition When Leasing a Commercial Space?
Guest blog by Holly Welles. Holly is a real estate blogger interested in the ever-shifting landscape of the market. You can read more of her work on her own blog, The Estate Update, and follow her on Twitter @HollyAWelles.

 

Looking for new office space comes with a lot of responsibility. You need to find the right building, somewhere your business will stay for a long time, plus a landlord who cares about their renters. It's a lot to juggle, especially if you don't know how to value building condition.

The condition of any building you're potentially going to lease is essential to consider before signing any paperwork. Read on to learn how important this is, and what you can look for specifically to make sure you choose the right spot.

 

1. Good Conditions Mean Good Landlords

The first thing good building condition shows is that it probably has a good landlord. They want to make a profit like any other person in business, but they also have to value and take care of the property they lease out.

 

You'll most likely come across a common area on your tour of a facility, so see what things are like in that area. Look for issues like:

  • Trash and dirt

  • Peeling or chipped paint

  • Ripped furniture

  • Ceiling stains

A landlord who doesn't care to clean a common area and replace what's broken or old is probably not concerned about building maintenance in general.

 

2. Better Amenities Demonstrates Effort

You'll be able to easily tell how much effort a landlord puts into his rental spaces by assessing the amenities that are offered. Office spaces should have functioning and updated kitchens and bathrooms, at a minimum. Without these, you won't be getting your money's worth from your rent.

 

There are also out-of-office amenities that are sometimes available as well, depending on the size of the building. Pay attention to the condition of the parking lots, gym or other facilities your staff could access. Is there an effort to keep up with the most valuable amenities on the market, or are these features falling into disrepair?

 

3. Good HVAC Units Build Trust

The HVAC unit is what's really going to make your future office a space people can work in comfortably. Check the thermostat in any rental you tour to ensure it works correctly. You should also ask to see the unit itself and then use an HVAC checklist so you know it's working. Look for overgrown shrubs or debris around the area, and listen for any strange noises while it's running.

 

It's also a good idea to ask when it was last inspected and how often that happens, which should be at least once or twice a year. Not only does properly maintained HVAC improve productivity, but it can significantly save on office energy bills.

 

4. Regular Repairs Prevent Damage

Sometimes repairs can get behind schedule. Things come up or the budget gets tight, and they have to be put off. That may happen, but they should never be forgotten about. Regular repairs prevent damage to your rental space. It's the responsibility of the landlord to ensure this doesn't happen, so they should be doing things like weatherproofing the roof if they lease in a severe weather prone area.

 

It’s crucial to comb through your prospective lease for information on how regularly you can expect building maintenance. Another great way to check on the history of a building's repairs is to talk with other building occupants. Try to speak to former and current tenants to get their take on how much the landlord actually cares for their property.

 

5. Wi-Fi Optimization Strengthens Connections

One of the most critical parts about running a business in the modern world is having access to high speed, reliable Wi-Fi. It makes everything run, which is why landlords should be able to talk about their current accessibility.

 

Not every building will have Wi-Fi as part of the rental agreement, so if you have to pay monthly through an internet provider, that's fine. What's not OK is if the building doesn't have enough router hookups or ability to connect with local internet providers.

Talk with each landlord you meet about the Wi-Fi situation with their renters to determine if it is the best place to conduct business in.

 

6. Foundation Issues Decrease Value

Another important question to ask is how often the foundation of the office building gets inspected. Foundation issues are more common than most people realize, but it severely impacts the value of your rent money.

 

When a building has foundation issues like cracks, sinking or decay, it decreases the property value. That means you'll likely be overpaying for your office space if the landlord doesn't ensure regular foundation checks with a professional team.

 

Any landlord should be able to talk about foundation inspections and how they maintain that schedule currently.

 

7. Repairs Demonstrate Care

Before you sign the paperwork, ask the landlord what work they've recently done to their property. They may talk about how they've repaired siding issues, repainted or replaced the old elevators.

 

The size of their repairs and how recently they've done them will show if a landlord truly cares about their property, or if they're only out to make money.

 

If there's been a recent weather event or construction going on, ask if any repairs have resulted from that experience. You'll get a better idea of how well the landlord keeps up with the place, especially after potentially damaging experiences like storms.

8. More Work Means More Money

What building quality really comes down to is this⁠ — you need to be able to trust that you won't have to spend extra money on repairs and renovations after you sign your lease.

Only building owners should have to worry about that, or if a renter wants to do something specific, like redesign their office. Landlords should be proactive about repairs, which means the office spaces and buildings you tour shouldn't need extra work.

 

Don't Accept Bad Conditions

Building condition is a major player when it comes to deciding where to rent office space. It's a long-term and potentially permanent place where your business will operate, so the buildings you look at should be in the best condition. Anything that appears as a red flag should be a big sign that the property won't be worth your time or money.

 

Here are a few other articles we know you'll enjoy:

Reasons to Lease a Green Building

6 Tips When Expanding Your Office Space

A, B, and C Class Office Space - What You Should Know

 

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Holly Welles

Holly Welles is a real estate blogger interested in the ever-shifting landscape of the market. You can read more of her work on her own blog, The Estate Update, and follow her on Twitter @HollyAWelles.

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