Top Ten Tips for Choosing a New Space for your Business:
Don’t commit to a new space before reading these tips for choosing your next commercial space!
As a business owner securing a new location for your business, you want to know that you are getting the best space for the best price, with no surprises. In this post, our team reviews the Top Ten List for Shopping for your next space.
In this article you will learn:
- How to create a shopping list for your next space;
- Tips for choosing your space; and,
- How to “seal the deal”
HOW TO SHOP:
According to a recent article in Entrepreneur magazine, “Criteria to Consider When Renting Commercial Space” by Joe Worth, your search can never begin too soon, as Worth suggests starting your search early, “the more time you have, the more leverage you’ll have during negotiations.”
According to Worth, your shopping list should include the following ten items for consideration, when choosing your next commercial space:
1. Rent: How is the chargeable square footage calculated? Make sure you are comparing apples to apples.
2. Lease Term: What is the length of the term? What are you willing to live with? Landlords will have their own preferences; you will need to consider what works well for you.
3. Rent Increases: How are they calculated? Are they automatic?
4. Extra Costs: What is included in the rent and what do you need to pay on your own? Depending on the type of lease, you may also be responsible for paying common area maintenance (CAM) charges, in addition to utilities, taxes, and insurance.
5. Prepaid Rents and/or Deposits: Landlords may require a deposit or similar first and last month’s rent before move-in date.
6. Cost of Improvements: These costs are often paid by the landlord, which will subsequently be rolled into the rent – typically over a longer term lease.
7. Conditions of the Build-Out: Find out who will be responsible for oversight of the work and who is required to approve it.
8. Maintenance and Repairs: Very often, the tenant is responsible for maintenance and repairs, except common areas – be sure to clarify who is responsible for what.
9. Right to Sub-Lease: Find out upfront, if you have the landlord’s approval to sub-lease the space down the road.
10. Exclusivity Rights: Especially if you are in retail, you will need to inquire about exclusivity, so competitors do not open a store in the same building or complex.
Once you have found your ideal space, try to narrow down to your top two or three. Then, begin to work with your broker to negotiate your top pick. Once a satisfactory deal has been negotiated, Worth suggests that you hire a real estate attorney to examine the lease agreement (be sure that this is a real estate attorney, vs. your general counsel). They will be able to review the agreement in consideration of your specific interests.
GO GET THAT SPACE!
Now you have some of the top tips to choose your next lease space! Our team has a variety of additional tools for you, as you search for lease spaces. Be sure to check out our Space Calculator, and view our current Lease Space Inventory. Then, contact our team to start looking at lease spaces for your business!