What to Look for When Signing Your Commercial Lease
Category Advice
Signing your first commercial lease can be a daunting task, because unlike residential leases, commercial tenants aren't offered much in the way of built-in protection.
While a commercial rental contract isn't a standard document and can be complicated, you can navigate this territory quite seamlessly if you're armed with the right information and supported by the right people.
Here are some key factors to consider before signing your first commercial lease
Be sure of the location
You can have the most favourable terms outlined in your lease agreement and still be negatively impacted by the wrong location. Take the time to fully consider all the implications of what each location could mean for your business.
Make sure the location can support the full scope of your business needs, including:
- Foot traffic
- Visibility
- Accessibility
- Security
- Room for expansion
- Proximity to clients
Understand the space
Be sure to familiarise yourself with the space very well before signing your commercial lease. Are the premises structured and equipped to do what you need them to do? If not, will you be able to easily adapt the space to accommodate your day-to-day activities?
With remote and hybrid working environments increasing, consider that your potential space might not have to physically accommodate your whole team all at once. Perhaps you will need more boardrooms and fewer offices, or more hotdesks and more entertainment space.
Consider all costs
Understanding the numbers and making allowances for all kinds of likely (and unlikely) expenses is vital. Picking a property that needs a lot of upkeep will require you to fork out a lot more for maintenance from the get-go, whereas a well-maintained, recently refurbished property will typically only need intensive maintenance further down the line.
Other costs to keep in mind include:
- Rates and utilities
- Vacancy expenses
- Emergency costs
- Signage
- Legal and administrative costs
- Management fees (if you are using a managing agent)
Negotiate
When it comes to commercial real estate, it's important to know when and where to negotiate. Most terms contained in the agreement should be up for fair negotiation. The landlord and their legal team have their own agenda, so making sure you bring your requests to the table for consideration is also important. Discuss your strategies with your agent who will then be able to negotiate on your behalf.
Know your rights
A common fear among first-time commercial buyers is the fineprint. From a contractual perspective that is completely understandable, because no one wants to get locked into a bad deal. Signing such a jargon-loaded, irontight document can be daunting without a professional taking you through it, line by line. Having the right commercial real estate agent in your corner can make all the difference in helping you understand your rights and what to expect in the buying process.
Looking to lease a property for your business? Contact us!
Not only can we help you find the right property, but we can help get you the most favourable terms laid out in writing for your peace of mind - before you sign on the dotted line. Our comprehensive knowledge of the commercial property market will prove invaluable on your property search. Get in touch today.
Author: SAProperty.com
