Moving into a new commercial space is a serious undertaking. There are several complex steps to complete in order to get your business back to fully-operating at peak performance following a relocation. But first you must sign a new lease. Before you do so, there are various considerations to apply to your decision in order to protect yourself from entering into a contract you later regret.
Continue reading to learn which factors should be at the forefront of your mind when discussing a new commercial real estate lease prior to signing.
General Commercial Lease Inquiries
With all new commercial real estate leases, there are basic questions that you must ask. These answers will give you the foundation of knowledge you need to decide whether or not to move forward with the lease agreement. Such questions include the following:
What is the Type of Lease Offered? There are different types of lease agreements for commercial properties, including net leases, gross leases, triple nets, and absolute triple nets.
What are the Terms and Conditions? You must read through all terms and conditions, and derive questions pertinent to your overall objectives and limitations.
Is the Lease Negotiable? Most often, lease agreements are flexible, and landlords will negotiate certain elements in the lease’s terms and conditions.
Will Rent Increase? Rent escalation is common in commercial real estate, like stepped increases that periodically increase in fixed amounts, or increases tied to Consumer Price Index.
Can You Sublease? Long-term leases might contain a subleasing and assignment clause that allows you to lease out all or a portion of your space to another tenant in the future.
Comprehensive Facility Touring
Always be sure to tour the facility as thoroughly as possible before signing a lease. You want your potential commercial space to have an inviting and functional atmosphere. When taking your tours, be sure to focus your attention on cleanliness, attractiveness, curb appeal, practicality, degree of remodeling or renovation needed, and amenities available, like parking, cafeterias, bathrooms, break rooms, lobbies, and more.
Neighboring Properties
Before entering in a legal contract that binds you to a commercial office space, it is wise to first check out your future neighbors. Consider the local businesses and buildings surrounding your potential space, including the actual proprietors and contemporaries you will likely encounter on a regular basis. This could easily thwart your interest in a new commercial space. For instance, if your business is a Zen spa, you wouldn’t want to lease a space directly below a dance studio or next door to a drum store.
Renewal Processes
It is wise to ask about the lease renewal process before making any agreements. Inquire about the terms and conditions of renewing or terminating the lease. In some cases, a tenant is required to notify the landlord within a certain time period that they wish to remain in a lease, while others do not. Communication guidelines and requirements for commercial leases vary from landlord to landlord. So, always be sure you fully understand your role when it comes time to renew or terminate your commercial lease.
Leasehold Improvements and Maintenance
Another important topic of discussion to cover prior to signing a new commercial lease are leasehold improvements. This includes facility maintenance. Questions to ask include, “Are you allowed to modify the space to meet your business’s needs?”, “Is the landlord willing to make tenant improvements before you move in?”, “Is the tenant improvement allowance enough?”, and “Is a maintenance program included in your lease?”
Professional Commercial Space Planning in Indianapolis
Call BAF Corporation at 317-253-0531 to learn more about planning a new commercial space for your business. We provide full-service commercial space planning and permitting services in Indianapolis, and throughout Central Indiana for all businesses and industries. Whether you’ve already moved into a new space or still searching for one, our commercial construction management team has what it takes to meet your unique specifications. Call our office today to discuss your commercial space planning and tenant improvement needs, today.
