EVERYTHING YOU NEED TO KNOW BEFORE LEASING A COMMERCIAL PROPERTY
Leasing a commercial property is a significant step for any business, whether you’re a startup, expanding, or relocating. Understanding the intricacies of commercial leases can save you from costly mistakes and ensure that your new location serves your business needs effectively. At Create Real Estate, we’re here to guide you through the process. Here’s everything you need to know before leasing a commercial property.
Understand Your Business Needs
Before you start looking for a property, it’s crucial to have a clear understanding of your business requirements. Consider the following:
Space Requirements: How much space do you need now, and how much might you need in the future? Consider office space, storage, and customer areas.
Location: Choose a location that is convenient for your customers, employees, and suppliers. Think about foot traffic, accessibility, and proximity to competitors.
Budget: Determine your budget, including rent, utilities, and other expenses. Remember to factor in potential future rent increases.
Types of Commercial Leases
There are several types of commercial leases, each with different responsibilities and costs. Common lease types include:
Gross Lease: The tenant pays a fixed rent, and the landlord covers most expenses, such as property taxes, insurance, and maintenance.
Net Lease: The tenant pays a base rent plus a share of the property’s operating expenses. There are various forms of net leases, including single net (N), double net (NN), and triple net (NNN) leases.
Percentage Lease: The tenant pays a base rent plus a percentage of their business’s gross income. This type is common in retail spaces.
Key Lease Terms and Clauses
When reviewing a lease, pay close attention to the following terms and clauses:
Lease Term: The length of the lease, including any options to renew.
Rent Escalation: How and when the rent will increase over time.
Security Deposit: The amount required upfront and the conditions for its return.
Maintenance and Repairs: Responsibilities for property upkeep and repairs.
Use Clause: Specifies what type of business activities are allowed on the premises.
Assignment and Subletting: Rules for transferring the lease to another party.
Termination Clause: Conditions under which the lease can be terminated by either party.
Zoning and Permits
Ensure the property is zoned for your type of business and that you can obtain all necessary permits and licenses. Check with local zoning authorities and consult with a legal expert if needed.
Property Condition
Inspect the property thoroughly before signing a lease. Look for any existing damage, structural issues, or compliance with health and safety regulations. Consider hiring a professional inspector to ensure everything is in order.
Negotiate Lease Terms
Don’t be afraid to negotiate lease terms to better suit your business needs. This could include negotiating rent, lease term length, or responsibility for repairs and maintenance. Working with a commercial real estate agent can provide valuable insight and leverage during negotiations.
Legal Review
Have a legal professional review the lease agreement before you sign. They can help identify any potential issues or unfavourable terms and ensure that your interests are protected.
Plan for the Future
Consider your business’s future growth and flexibility. Look for properties that can accommodate potential expansion and be mindful of lease terms that may restrict your ability to move or change your business operations.
Leasing a commercial property is a complex process, but with careful planning and due diligence, you can find a space that supports and enhances your business. At Create Real Estate, we’re here to help you navigate every step of the journey. Whether you’re looking for the perfect location or need assistance with lease negotiations, our team of experts is ready to assist you.
If you have any questions or need further guidance, don’t hesitate to contact us. Your success is our priority, and we’re committed to helping you find the ideal commercial property for your business.