Worst Mistakes to Avoid When Negotiating a Commercial Lease
The prospect of moving your startup into its first office is both exciting and daunting. This is an extremely important decision to make, as it will have a lasting effect on your business. The negotiation phase is far more important than just determining how much rent you’re going to pay. There are so many facets to a lease, and simply glossing over the fine print can have disastrous effects on your business. Here are some mistakes that you should avoid committing when negotiating for a commercial lease.
Rushing Your Lease
Most first-time tenants underestimate the time required to find a place that’s suitable for their business. Negotiating for the lease also takes a good amount of time. Haste always makes waste, and with big decisions like a commercial lease, failing to research the market and explore your choices can end up costing you more money than necessary. It’s important to dedicate time to conduct your due diligence and to determine what you want in an office space. Tenants should also take the time to inspect the space before committing to it, which also takes time.
Neglecting Location
Location can have a huge impact on your business. The surrounding area of your office can influence the growth of your business. External factors such as traffic, accessibility, and safety all affect your business growth. This is especially true considering the fact that the amenities of your office benefit both your clients and your employees.
Failing to Account for Build-Out Costs and Taxes
It’s important to account for the real estate tax of the building you’re planning out to rent, as well as the costs associated with building. This ensures that you have a full overview of the total expenses that you’re going to be incurring to have the place redesigned for an office environment.
The reason behind this is that there are landlords who let tenants incur the taxes and remodeling expenses. Make sure that you know what percentage of these expenses falls within your responsibility. The failure to do so enables the landlord to increase your taxes more than what is required.
Not Having Basic Market Knowledge
As with any major decision, prospective tenants need to do their due diligence. Foregoing basic market knowledge puts tenants at a significant disadvantage and this may also lead to major complications in the near future. Don’t be ashamed to ask questions or to clarify any concerns. While this might lengthen negotiation times, this will ensure that both tenant and landlord are clear on the terms of the lease.
Negotiating the Lease Without a Professional
While it’s possible to negotiate the terms of your lease on your own, you’d be foregoing your best advantage in these negotiations. You should never negotiate the terms of a lease without a commercial real estate specialist like the ones at the Jeff Tabor Group to help you secure the best possible terms and conditions for your commercial property lease.
These professionals have extensive market knowledge, experience, and connections that they can leverage for your benefit. They are definitely worth the cost to hire considering how much money and trouble they can save you and your business. There’s absolutely no good reason to forgo their help.
Rental properties are a significant long-term expense. Negotiating the terms of your rental should be given your best attention. Be aware of these critical mistakes in order to avoid making them.
