When it comes to renting office space, you can never be too careful when signing a lease. Failure to do your due diligence can lead to problems. For example, the wrong space can hurt your business if it's hard for your customers to get into your building or if you don't have the amenities they need.
SummaryWhat happens if the space is not ready by the scheduled move-in date?Does the lease come with an option to renew?Will the landlord pay for the cost of changes (such as new carpet, special electrical needs, etc.)? How much traffic does the area receive? Do you have a “right of first refusal” if the space next to yours becomes vacant? Is it possible to get a non-competition clause so that a competitor cannot open a shop in your center or building? Is it possible to enter into a CAM Stop lease? What happens if a major system (such as electricity , plumbing or HVAC) breaks down? Who is responsible for the insurance? Will the office space meet your technology needs?To minimize the risk of these and other disasters, consider getting professional property management and ask your commercial property management agent the following questions:
Unless your office is ready, you can't be sure there won't be any more problems. To avoid last-minute issues, you should check to see if your lease is clear about what can happen if your office space isn't ready by the move-in date.
Read the fine print carefully. Beware of terms that your landlord can place you in another office space in the building if your designated area isn't ready by your move-in date. Being forced to occupy temporary space will only increase the costs and other problems associated with the move.
After your lease expires, the landlord has no legal obligation to offer you the same space – unless there is a renewal clause in your lease. This ensures that you will have the first dibs on the space when the lease expires.
You'll probably want to modify and update your new office space to meet your specific business needs. In most cases, you will be responsible for these costs. However, some landlords are willing to amortize the costs over the term of the lease, so be sure to ask.
See also:How often should a landlord replace carpet or repaint a rental unit?
Is your building centrally located near train stations and airports to accommodate frequent business travelers or out-of-town clients? Depending on your type of business, this can help determine how much traffic you will receive. The agent should have information on community demographics, number of cars, and other essential statistics available.
There are instances where a tenant is faced with unexpected growth and when that happens there are landlords who will move you into a bigger space without penalty. If there is a “right to refuse” clause in your lease, it will ensure that you get the first dibs if adjacent spaces become vacant.
When renting office space, it's a good idea to consider the security of your business first. Having a competitor nearby can spell disaster for your business, so check to see if there are zoning laws in place to protect your business. You can try including a clause in the contract that prohibits your landlord from renting nearby office space to direct competitors.
Many leases today are triple net. For example, you will be responsible for paying the rent as well as a share of the property taxes and CAM fees for the property.
A Cam Stop lease will ensure that you are only responsible for increased property taxes and CAM fees above your initial base year. You can also request a cap on the CAM so that it does not increase by more than a certain percentage.
Agreements on repairs and renovations should be in writing and ideally accompanied by a detailed floor plan and cost estimate from a reputable contractor. But, it is important to note that this standard is different from one property to another.
When signing a lease for office space, we tend to skip the insurance. And, as a result, many buildings, especially those with multiple tenants, are covered by insurance policies that are insufficient in some ways and overlapping in others. So if a major disaster occurs, such as a fire, it can take years for the various insurance companies involved to verify claims and decide where coverage begins and ends.
Most commercial properties offer tenants networking options such as T1, fiber, DSL and cable. If your business needs a ton of bandwidth to run smoothly, make sure the property has the infrastructure to meet your needs.
Moving to a new commercial space can be a hassle. But, if you ask the aforementioned questions to your sales agent, it can relieve you of a lot of headaches. Good luck!
See also:One Size Doesn't Fit All:How Office Space Fits Every Stage of a Business Trip
