Your commercial leasing experience shouldn’t be stressful—it should be educational. That’s why we’ve come up with three aspects of the lessee experience that can make or break your experience. When you’re educated about the process, you can make ‘signing away’ a breeze.
You Don’t Understand the Lease Agreement
The biggest mistake that commercial lessees run into is not being knowledgeable enough with the understanding of what their lease entails—as a result of not being experienced enough with commercial office lease/buying. First things first: understand, especially if you’re not used to signing commercial lease contracts, that the lease will be long. It will be filled with legal jargon you won’t understand, and it will be a bit biased in the landlord’s favor. These things are all ok if you accept that this is what you’re dealing with and act accordingly.
Take time to understand the lengthy lease by meeting with a commercial office broker you can trust, and a lawyer. Once these two instrumental ‘team’ members explain everything you need to know, you can ask the right questions to make an informed decision about accepting the terms, or passing.
You Haven’t Taken Into Account the Extra Fees
Many commercial building lease agreements include hidden costs and fees you may not even think about if you don’t ask, or have someone to point it out to you. For example, first time lessees get often get into trouble signing a lease agreement without understanding that aside from rent, they’ll also be responsible for paying property insurance, property tax, and/or maintenance of common areas. Also, remember your place of power—you can negotiate the terms, which is another reason having the right broker (who may know the landlord) will work in your favor. Once you become the lessee, the last thing you should worry about is extra rent you didn’t thought existed. You should be focused on the growth of your business—not paying more rent than expected.
You Haven’t Taken Into Account Future Downsizing or Growth
Are you thinking about signing a three or five year lease? If so, it’s the perfect time to become future-focused. What might happen in the near future could negatively or positively affect the space you choose. If you’re going to negotiate anything, negotiate the terms of space. In other words, what options will be available to you if you decide to downsize or add more space?
The more flexible the terms, the better it will be for your business in the future. Another important question to ask is regarding subletting. Make sure you understand the arrangement you have with renting part of your space to another, and realize this is another opportunity to negotiate the terms!