5 Mistakes Commercial Tenants Make When Leasing Office Space
When it comes to leasing office space, tenants often make mistakes that can be costly. Your office space is one of the greatest assets to your company, so it’s important to be smart when leasing by avoiding these five common mistakes.
Mistake #1: Lack of Solid Plans
Many tenants begin looking for office space without knowing exactly how much space they will need. It’s important to know how many square feet you’ll need for your office and you should also take into consideration how much growth you’re planning for the future.
The easiest way to fix this is to consult with an architect and have them create a space program for you. Timing is another thing most tenants lack to consider – how long will it take to move into the new space or renew the lease? Depending on the size of your company, it could take up to a year to move.
Mistake #2: No Tenant Representation
Hiring a broker will benefit you in the long run because a broker knows the ins and outs of the real estate market and can negotiate for you and help you find an office space that best fits the needs of your specific business. They simply have knowledge about the leasing process that you do not and they can help you avoid leasing a space that you’ll end up leaving a year or even months later. A partner that knows the commercial real estate business will help you save time and money.
Mistake #3: Not Understanding Documents
Look over documents and read them thoroughly before signing them. Many tenants sign documents without fully understanding what they’re signing, leading to problems down the road. Your ownership documents should be vetted by a professional to ensure that your office space is legally zoned for commercial purposes and that it’s up to safety codes.
Another tip is to make sure the heating and air conditioning and other important systems are inspected before moving your office in. The lease should outline the current status of these systems and whose responsibility it is to maintain them.
Mistake #4: Not Checking Lease Terms
One of the most important aspects of leasing a space is understanding the lease terms. If your notice period is 30 days will you be able to pack and move within a month? There could also be the chance that your landlord has the right to move your office within the building to another floor or space in the building with little notice.
A real estate professional with experience in your particular market can help you navigate lease terms that will help not hinder you.
Mistake #5: Underestimating the Power of Negotiation
You have power when it comes to negotiating your rent. Take a look at the comps around the area you’re looking to lease office space in to make sure you’re receiving a fair rent. Landlords are looking to fill the spaces in their buildings and many will negotiate with you in order to fill their empty slots. Don’t be afraid to challenge the rent price if you feel that it’s not in line with the rent prices in the area. You could end up saving your company thousands in the long run due to the power of your negotiating skills.
These are just a few of the many considerations to make when leasing commercial real estate space. For more pointers, browse our Coldwell Banker Commercial blog.