Understanding the intricacies of commercial real estate is essential for your business's success. As you embark on the journey to find the ideal property, remember that due diligence is your most powerful tool. It's a process that goes beyond simply choosing a space—it's about finding a strategic asset that aligns with your vision and propels your business forward. With a focus on what truly matters to you, let's delve into the critical dos and don'ts for selecting and securing a commercial real estate property. By adhering to these guidelines, you're not just finding a new location; you're setting the stage for your business to flourish while avoiding common oversights.
Dos for a Successful Lease Experience
- Do seek legal advice to fully understand your rights, responsibilities, and potential liabilities when engaging in any real estate transaction. Beyond advice from your commercial real estate broker, consulting with a qualified legal professional can give you valuable insights and guidance to protect your interests and make informed decisions. This proactive approach will provide a clear understanding of the legal implications involved, ultimately ensuring a smoother and more secure real estate experience.
- Do conduct a thorough inspection of the property before signing the lease. Identify any existing issues or required repairs and ensure the landlord addresses them. For Inspections, look for companies that are licensed and experienced. They often offer services such as structural inspections, environmental assessments, mechanical and electrical system evaluations, and compliance checks with local building codes and regulations.
- Do differentiate your private vs. public agenda when communicating with your landlord or property manager. Especially prior to a lease renewal or negotiation, consult your commercial real estate advisor about your public agenda vs. your private agenda before discussing your intent with the property manager or landlord. Communication between parties can foster a collaborative environment, allowing for prompt resolution of concerns; however, being too open with your intentions can cause the opposing negotiating party to see you as a captive audience and potentially cost you negotiating leverage.
- Do review and understand the property's security measures before finalizing your commercial property decision. Your commercial real estate advocate can provide data regarding the area’s crime rates and types of crime to help you understand how much security is advised. Your business and employees' safety should be a top priority, so ensuring the premises have adequate security systems and protocols is essential. By taking this proactive step, you can provide a secure and safe environment for your business operations.
Don’ts for a Successful Lease Experience
- Don't rush into signing a lease; it's essential to approach it with thoroughness and caution. Keyser recommends 18-24 months for planning to ensure that all aspects are carefully considered. Rushing into signing a lease without a comprehensive review of all terms and conditions can lead to unforeseen challenges. Take the time to negotiate and seek clarity on any ambiguous clauses. Understanding the intricacies of the lease agreement is crucial to ensuring that it aligns with your business goals and provides a solid foundation for your commercial real estate endeavors.
- Don't undervalue the significance of location. Consider factors such as proximity to your target market, transportation links, and amenities that would benefit your business. Additionally, when considering a location, consider the local hiring pool and employee demographics to ensure a good fit for your business needs.
- Don't underestimate the potential for unexpected costs. A commercial real estate advisor can help mitigate unforeseen costs by capping expense stops and CAM charges in your lease. Budgeting for contingencies, including possible rent increases, tenant improvements, utilities, maintenance fees, and property taxes, is essential. Keyser aims to protect your financial interests and ensure your lease terms are structured to minimize unexpected expenses.
- Don't settle for a lease renewal without evaluating other market opportunities. Even if your business’s initial intent is to renew your lease agreement, reach out to a commercial real estate advisor to show you what other opportunities are available in the market. Keeping an open mind can unveil properties that may be a better long-term fit for your business model and potentially create negotiating leverage through increased competitive pressure on the landlord. Ultimately, this approach empowers you to make well-informed decisions that align with your business goals and ensure a smooth transition when the time comes.
- Don't underestimate the potential for future growth or expansion. As the workforce and workplace flex with the economy and employee demands, create a backup plan in the event your business wants more or less space to accommodate your operational needs. Consider whether the property can accommodate your business's long-term plans, which can be negotiated into the lease agreement as Rights of First Refusal or Expansion Rights. These options provide flexibility and security as your business evolves.
At Keyser, we believe in empowering our clients with the knowledge they need to make informed decisions. We're here to guide you through the intricacies of the real estate market with clarity and confidence. Our approach is rooted in a commitment to delivering content that is not only educational but also approachable and reliable. As Keyser founder, Jonathan Keyser says, “We understand that each client is unique, and we strive to provide personalized service that puts your needs at the forefront.” Let's navigate this journey together, ensuring that every step you take is on solid ground.