Commercial Tenant Representative
When growing your business there will come a time when the business needs space expansion. Unlike searching for a residential lease which is a matter of location, rent amount and lease restrictions the commercial lease whether retail, office or industrial requires a great deal of due diligence (or investigative research).
There are many considerations such as financials, location, and access to highways, foot traffic and local zoning laws. It is always a good idea to go to local city or town meeting to get an idea of which direction the local government is going so that you won’t waste your time seeking a location that is in disagreement with local policies.
Once a location is determined then that is the time to really plan your leasing requirements. You can do it on your own but you are a business owner and your time is valuable and needs to be directed to the success of your business on a daily basis. So for the best deal when trying to secure a long term (usually 5 and up to 20 years you need to seek the guidance of a commercial leasing professional.
The following steps are a general guideline of the requirements involving the negotiations of a new or existing commercial lease.
Define Requirements – First know your budget and space requirements. You might want to consider whether you will need extra space in case your business continues to grow.
• Review existing lease
• Determine goals and objectives (renew vs. relocate)
• Establish budget and project timeline
• Determine size and layout (calculate your space requirements)
• Define location parameters
• Review building quality and image needs
• Identify technical and amenity requirements
Assemble Team – It is of the utmost importance to assemble a competent team of professionals. A commercial real estate leasing professional should have access to resources that they can refer you the right professional assistance.
• Project manager
• Space planner / interior designer
• Attorney / CPA
• Telecom provider
Prepare Market Survey – With your financials fully understood, you can begin to study your demographics to determine whether the local income structure can support your product of service. This is a very important part of the leasing process.
• Prepare survey based on needs analysis
• Identify “hidden” opportunities
• Review list of alternatives
• Assist in building selection
Tour and Evaluate Properties – This might seem like the fun part but there are a lot of nightmarish properties abound and you must be prepared to make important decisions before moving forward in securing a desirable location.
• Conduct building tour of likely alternatives
• Narrow selection to final alternatives
• Review list of alternatives
• Facilitate space planning for top alternatives
• Review preliminary construction costs
Analyze Proposals and Negotiate Terms – This is where the rubber meets the road. When determining your cost remember it is always better to overestimate rather than underestimate your costs.
• Prepare financial analysis
• Analyze space plan efficiencies
• Review construction costs
• Negotiate business terms
Select Final Building – Once you final location is determined then your leasing tenant representative will get more involved as far as determining your build-outs and free rent. Your leasing rep and your landlord fully understands that you can’t start making leasing payments before your business is ready to open. Of course the landlord will not bring this subject up unless you or your leasing representative initiates the conversation.
• Choose top alternative
• Negotiate final terms and conditions
• Submit letter of intent
Execute Lease – Once the terms, conditions, covenants, restrictions and all other agreements are reached then the lease is ready to be executed. In other words money has changed hands.
• Review lease
• Review work letter
• Facilitate lease negotiations with attorneys
Monitor Construction – You and your leasing representative will work hand in hand to make sure that the construction or build-outs are meeting your specifications. This is where experience really counts.
• Review working drawings
• Monitor construction progress
• Facilitate final walk through
Provide Post Occupancy Services – Your commercial leasing representative will continue to monitor the statue of your lease throughout the live of the lease.
• Prepare lease abstract
• Monitor critical dates
• Perform on-going follow-up
The Realm of Quiet Enjoyment – You’ve done your work. Now let your new space work for you. You are a business owner and your time will be well spent working ON and not IN your business. Enjoy!
Is your lease up for renewal? Are you considering relocation or a reduction in rent or more free rent? Does your business need to be valuated (appraised) to see what your business is worth today on the open market? This is the business valuation and not the building). Do you need financing? Your questions can be answered by sending an email to: [info@MatrixEquity.com] use LEASING in the subject line.