Deciding where to set up your business office is just as important as the business itself. The old real estate adage, “Location, location location” doesn’t just apply to residential properties. A business’ commercial real estate location has the ability to make or break a business. So how can you choose the best commercial real estate for lease that meets your needs?
Assess Your Needs
It all begins with an honest assessment of your building needs. Consider your business. Do you host client meetings at the office? If so, you’ll want to find a conveniently located office building location. Be sure to check the amenities offered at the location. Is there ample parking space or is it within easy access of public transit? How do the entryway, grounds and public areas look? Remember, although you don’t own this office building, it does have an impact on your image and how clients see you. You want it to represent you and your business values. A legal firm will require a much different facility than an artist’s studio, for example.
If you don’t see your customers very often and handle most of your work via phone or the internet, you’ll be less concerned about the physical space and more concerned about the building’s technological capabilities. Find out if the building has the infrastructure in place to meet your needs or if it can be added. You’ll also want to find out if these features are included in the rental price or if you need to pay for them separately on your own.
Do you send or receive a lot of packages? You may need a building with a loading dock and plenty of storage space. You might even prefer to rent out a stand-alone building instead of one that has shared space with other tenants.
Understanding The Terms Associated With Commercial Real Estate For Lease
Leasing is not as cut and dry as signing a one-page document that states how much you’ll be paying in rent each month. There are actually several different types of agreements and you may find that one type suits you better than another. Here are a few of the more common terms you’ll see when you look at commercial real estate for lease and the major points you need to understand about them:
• Percentage Lease. Often used in retail situations. Rent is usually a base rate plus a percentage of your sales.
• Net Leases. Can be found in any commercial situation. There are three different types: Net, Double Net and Triple Net. Tenant pays rent plus some or all of the taxes, insurance and maintenance costs in a Net Lease. In a Double Net, the tenant pays rent, plus taxes and insurance. In a Triple Net, tenant pays rent, taxes, insurance and maintenance costs.
• Full Serviced. Generally used in office agreements. Can be found in industrial or retail commercial real estate for lease as well. The landlord pays all or most of the usual operating costs. These costs are then passed on to the tenant in the form of a “Load Factor.”
Understanding the terms used in commercial real estate for lease can be overwhelming for some people. If this sounds like you, have your attorney review the document prior to signing and make sure you understand all of your rights and responsibilities upfront.
Finally, remember that your business location plays an important role in how well your business can function and support or serve your clients. Make sure the location meets your needs before signing any rental agreement.