Your Role As A Commercial Tenant
From who controls the property to who's at fault if something goes wrong and everything in between, your commercial lease will cover just about everything there is to consider as a tenant. If you leverage the expertise of the right broker, your role as a commercial tenant should be smooth sailing. It's during the few years prior to a lease expiring that you really want to be diligent and make educated decisions with the support of a broker. Let's review a few best practices that will make your leasing process easier.
#1 Give Your Broker Plenty Of Time
In order to reap all the benefits a broker can offer a commercial tenant, you want to be sure that you give yourself and your broker plenty of time to research the market and find the right fit - even if that's in your current space! We recommend engaging a broker eighteen to twenty-four months prior to lease expiration so that you don't get trapped by time constraints. You want to put yourself in the best position possible for negotiations and timing is a big part of that equation.
#2 Consider All The Costs
Your rent is only one part of the bigger picture of business ownership. When you're navigating the leasing process as a commercial tenant, you want to ensure you're investigating all the potential costs that may be tied to property usage. Consider fees for utilities, maintenance, and more.
Additionally, you'll want to weigh your choices carefully should you need flexibility later down the road. Most commercial leases are written for a number of years. A lot can happen within your business during that time. You want to be sure both you and your broker incorporate the potential for changing needs into the lease negotiations from the beginning so you can avoid additional fees or avoid factors that limit your business growth down the road.
#3 Prioritize Wants And Needs
As a commercial tenant, it's important for you to not only identify the wants and needs your business has for a space but also prioritize them. This will help you be both reasonable and selective throughout the process of identifying alternative spaces or re-negotiating a lease renewal for your current space. In certain market environments (like during a cycle that leans in favor of the landlord), negotiations are all about compromise. However, you want to be sure you're not compromising necessities because you didn't think your needs through before you were on the spot.
#4 Think Beyond The First Draft
When a commercial tenant and their broker get into the negotiation phase of the leasing process, it's important to recognize that the first contract is only a draft. You might be told it's standard, but that's far from the truth. Nearly every commercial lease is customized through negotiation to better support the needs of the business. Leverage the first draft of the contract as a starting point and reference your priorities as you dive into negotiations.
#5 Ask Questions
You have a responsibility as a commercial tenant to do your own homework. Don't be hesitant to ask questions throughout every stage of the leasing process. From finding a commercial broker to negotiating the final terms of your contract, there's a lot of moving parts. You'll thank yourself later when you ask the hard questions now.
A Proud Partner Of Commercial Tenants
With these tips, you can put yourself in the best position to negotiate a favorable lease. Start by engaging an expert who can help support you through the steps of the commercial leasing process. Lowrey Burnett is one of these experts and he regularly partners with commercial tenants to advocate for them and their businesses throughout the leasing process.
If you're a commercial tenant with a lease expiration approaching in the next few years, contact Fountainhead Commercial today to learn how we can advocate for you.