Looking to grow your business and get into a new commercial space? Leasing a commercial space is exciting, but it can also be overwhelming trying to find the perfect place for your business. Finding a space is more than just the building and price, here are a couple things to consider when renting commercial space for your business.
Type of Lease
It is important to understand the various aspects of a commercial lease before signing anything. This can include the type of lease, lease term and termination process. Commercial leases typically fall into one of three major categories. These are:
The tenant pays a flat monthly rate and the landlord pays operating expenses.
The landlord and tenant split the taxes, insurance and building maintenance.
Modified Gross Lease:
A mix between a gross and net lease, to be determined by the tenant and landlord.
Landlords typically prefer longer leases of 5-10 years, but a shorter lease of 1-2 years with a renewal option might offer more flexibility for your small business. Thankfully, contracts can typically be tailored to the needs of the tenant, as far as equipment on site, operating hours, tenant improvements, and general terms. Be sure to also discuss lease termination policies before making anything official in case you were to need to terminate early. Make sure you have a plan set in place that will make things as painless as possible for you and your business.
Neighbors and Location
Another very important aspect of renting commercial space is knowing the area and neighbors around your space. Nearby neighbors could potentially play a large role in lease negotiation. You could sign a co-tenancy clause, in which you could break your lease if a nearby tenant that you were relying on for business were to leave. Additionally, you could sign an exclusivity clause with your landlord to avoid any competitors signing leases for spaces close by. You will also want to research the demographic and psychographic statistics to make sure your product or service would be of use to the area.
There is a lot that goes into renting commercial space, but it doesn’t have to be done alone. Working with a professional broker can help alleviate the stress of finding a space for your business and dealing with the legal jargon in a commercial lease. This could end up saving you extra costs and stress down the road.
If you are considering renting commercial space for your business, make sure you do your research. Never sign anything without fully understanding the terms and carefully evaluating them. Finding a new space for your business is exciting and sometimes intimidating, but doesn’t have to be scary. Contact us if you need some assistance, from finding a property to negotiating leases, we are here to help!