Finding a space that best suits your business can be overwhelming. When you view a property, you will hear the leasing agent mention numerous real estate terms such as building classification, annual rent, build-to-suit, standard improvement allowance, to name a few. However, unless you have worked in the sector or leased commercial property in the past, these terms and intricacies of leasing might be new to you. Therefore, we have outlined a few necessary steps for any business owner to follow when they are seeking their next office or retail commercial space.
Tip #1: Know Your Budget
Before you start reviewing prospective properties, identify what your budget is. This will be the guiding factor when you begin viewing spaces. Be realistic on what you can afford and do not overreach – this can cause your business to suffer from greater-than-anticipated expenses. When you are creating your budget, be sure to include the following potential hidden costs: incidentals, moving expenses, renovation fees, cost of downtime, repairs, and possible lawyer fees. Also create a forecast, taking into consideration rent increases and projected income from the business.
Tip #2: Identify Your Use and Essentials
Outline how the space will be used. Both retail and office space must be assessed by their square footage – make sure to leave opportunity for business growth if that is in your business plan. Once you have that identified, make a list of which essentials you require in your lease and what amenities you want in your building. For example, if you are opening a new office, ask yourself what amenities you want to have for your employees? Are you looking for a space that has a kitchen and access to a gym? If you are looking for a retail space, do you want a space that is energy efficient or one that can attract walk-in customers from neighboring businesses?
Tip #3: Keep Your Clients and Customers in Mind
Don’t forget, the space you select will be the first impression on your clients and customers. Although you may be swayed to choose the lowest cost space, this can negatively impact your business in the future. Your clients and customers will want to feel comfortable and ready to do business with you. So, if you are looking for office space, think about finding a space that has a conference room and ample parking for potential clients as well as employees. If you are renting a retail space, think about location – are you interested in getting foot traffic, does your space have parking, and its proximity to other community services. Completing an in-depth assessment of your needs and the expectations of your customers will help you weed out specific spaces.
Tip #4: Compare the Places you View
Create a comparable analysis of all prospective spaces. Include in your review available leased square footage, unit lease price, incremental expenses (including maintenance), lease term required (how many years), plus pros-and-cons notes about each property. This will act to give you a snapshot of your potential locations and weed out the ones that require too many compromises. Narrowing down the potential spaces in this way will also help you make a more quantitative assessment of prospective locations.
Tip #5: Work with a Professional
While you may be hesitant to hire a leasing agent to save on costs in finding a new location, and you may be tempted to limit your searches to websites such as LoopNet, this could mean leaving money on the table. Leasing agents work in the business day in and day out – they can help you identify available space, review the proposed lease, and negotiate prices. In the end, the potential savings you receive from a good deal can more than pay for the cost of a leasing agent. Plus, the leasing market can be extremely competitive, so having someone represent you in the industry can help you get the space that best suits your business goals.