Leasing commercial office space is a common problem that many business owners pay close attention to. Success or failure in this decision depends on one’s ability to select and then negotiate the commercial real estate property that is best suited for a business. After selecting the right location for the business and making the final rental decision, the next phase is the leasing process which will involve the formulation of significant parts of the lease. The following is this process from start to finish.
Step 1:Analyze leasing requirements and needs
The rapidly changing world of business believes that the words “growth” and “risk” are interchangeable. Securing commercial property for a business operation is both exciting and scary. Undoubtedly, a company aspires to success, but it can encounter various dangers along the way. This is common in running any type of operation, so an owner must stay focused and focused on meeting all the basic goals.
Basic objectives in the acquisition of a new property:
- Increase– The new location should provide space for growth and expansion of the business.
- Transferable– The contract must be transferable without penalty.
- KING– The new location must offer a high return on investment throughout the duration of the contract.
- increase profits– The new location should help increase cash flow to offset the cost of relocation and still allow for a positive net income for the business.
Lease Terms
To avoid future complications, it is important for a business owner to understand and review the terms of the office lease. Both the tenant and the landlord must be aware of the obligations, terms and conditions relevant to the rental of the property.
The terms of the lease must clearly describe the following:
- Contract period– Clearly indicate when it starts and ends.
- Monthly payment – Declare any escalation of the monthly rent.
- Annual lease amount– Summarizes the total rent paid in a year.
- Lease Category– Indicate specifically if it is a net or gross category.
- clauses– As appropriate for both the lessee and the lessor.
- Renewal– The right to renew the contract, normally by both parties.
- Obligations of both parties– Specific statement of who is responsible for what items in the office, such as renovations, repairs, and maintenance.
- Security deposit– How much of a deposit is required, as well as the conditions for its return to the lessee once the contract is satisfactorily completed.
- Termination Rights– Define how both parties can terminate the contract.
- Taxes– Detail of which party is liable for the assessed property taxes.
Workspace requirements:
- Public services and amenities
- furniture and equipment
- physical dimensions
- proper lighting
- Office cubicle dividers
Step 2:inspect facilities
After determining the basic requirements of the business, it is important to visit the various properties available for rent for space planning and general comparison purposes. Ensure that the new location meets the needs of the company.
Step 3:Secure the necessary documents
Once a decision has been made on which property to lease, the final documents must be drawn up to process the lease. The necessary documents are:
- Intention letter
- Offer and Acceptance Agreement
- Leasing contract
- conditioning period
All documents must be prepared in advance so that either party can have a real estate broker or attorney review the documentation if necessary.
The commercial leasing process can be lengthy; With the right guidance, it can be a headache-free and successful outcome for both the owner and the tenant. For those interested in the final ‘Advice, Negotiation, Forms and Transfer’ steps, that part will be covered in another article. Hopefully the first steps listed here to Analyze, Inspect and Insure will lead any business to securing the best commercial office rental for their company!
