Realty Tips
Leasing Tips for Commercial Space Finders
- Hire an Experienced Tenant Rep Broker
Does Your Company rely on Chartered Accountants for financial matters,
Attorneys for legal matters, and Managers for productivity matters? Of
course! Relying on a Tenant Representation Broker is essential to
handling Corporate Real Estate.
- Understand Your Objectives
When we meet with our clients, we go through a detailed Needs Analysis
with them to understand the strategic needs of their company and how the
corporate real estate component can help them be more competitive in the
marketplace, attract strong talent, be easily accessible for their
customers, and what are their specific geographic, facility, and
financial requirements.
- Start the Process Earlier Than You Think You Should
If your lease is ending in the next 9 (nine) months, it’s very
important to engage a Tenant Rep now. It takes time to understand your
company’s ideal real estate solution, and the space that you’re
looking for may be like finding a needle in a haystack—it takes
time. When we’ve located several possibilities—ideally, we
want to have the landlords competing for your business—if time is
on your side, you’ve got leverage. The more time you have, the more
leverage and negotiating power.
- Read the Lease (including all exhibits and regulations)
Once you have worked with your Tenant Rep to hammer out the most
advantageous letter of intent, the next step is drafting a lease. Lease
Agreements are written by the landlord’s attorney (translation: the
lease is written FOR the landlord, not the tenant). Be mindful of
provision in a lease that would pose problems for the daily operations
of your business. Always ask your Tenant Rep to review the lease for
business points that adhere to your Company’s needs and find an
efficient attorney who can ensure the lease is enforceable.
- Beware Less Than Market Rent
Many times a low asking rental rate is simply the base rate. Then,
there are additional operating cost pass-throughs which add to the base
rent as additional rent. Ask for a cap on increases and understand what
calculation method is normal in your market.
- Abate Rent if Damages Prevent Business Operations
You should not have to pay rent during the time you cannot use your
space. If a fire on another floor prevented your employees from reaching
your office or the ceiling collapsed due to a leak, this will make
operating your business difficult. You shouldn’t pay rent during
those times.
- Never Depend on Verbal Commitments
I met with a tenant who told me his landlord’s property manager
had promised they would install new signs within a retail center. It was
never done. Never rely on verbal commitments—if you expect
something to be done, it must be in writing.
- Understand the CAM Charges
It is always better to understand the Common Area Maintenance Charges,
taxes levied on top of it and any upfront deposit, if required to be
paid by the Tenant.
- Know what services you’re paying for and what is paid for by
the landlord.
Your lease should describe in detail the condition of the space you are
leasing and all services for which the landlord is responsible for eg:
Property Tax, Building Insurance etc. which is subject to the
negotiation between the Landlord and the Tenant. Be sure the lease
describes the list of services included in the rent such as utilities,
electric power, power backup, restrooms and maintenance thereof, and any
others you might expect the landlord to provide.
- Know the Difference between Usable sq.ft. and Rentable sq.ft.
(Chargeable / Super Area)
As a Tenant, you must be aware of what is the Chargeable Area and what
is the usable area and in what proportion in terms of percentage it is.
- Know the Connectivity and Transportation
It is very important to have an idea about the local transportation
available and till what time, good surrounding to ensure the safety of
staff in your office.
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