Has your small business grown to the point that you need to rent commercial space? Is it time to expand from the small space in which you started? Commercial real estate is quite different than other types of real estate, so going into the search with a few tips under your belt will help you negotiate the best deal possible.
Rentals in the commercial sector are on the rise, with an annual growth of 5.1 percent over the last five years. In some areas, a lack of commercial space and high demand may make finding the perfect location challenging. Fortunately, there are some tried-and-true tips that will help you find the ideal location and take your fledgling business to the next level.
Here are five tips to help you find the perfect place to rent:
1. Take Your Time
Even if you’re busting at the seams, don’t rush into a decision when it comes to leasing space for your business. Rushing is one of the biggest mistakes business owners make as they grow and need to expand. However, there are many factors to consider before making such a big decision, including future growth trends and whether you’ll be able to expand where you’re leasing or will have to begin the hunt for yet another location.
2. Put the Word Out
Don’t make the mistake of only searching real estate listings. Instead, use your network of business owners and local leaders to find the next space for your business. There may be someone you know with the perfect space and location who hasn’t yet put their place on the market. Ideally, they will also give you a great deal, but first, you have to find the location that works for you.
Even if your network doesn’t have a place to rent, they’ll keep an eye out for one and let you know what they come across.
3. Choose Features Ahead of Time
Recommended considerations for new corporate spaces are a little more complex than they were in the past. In the age of open office spaces, professionals suggest envisioning how your office will facilitate team communication and support the culture you want to create.
Before you begin the hunt for a building, take the time to write down the features you need for your business. Which ones are non-negotiable? Having a list of features not only saves you time, particularly if you’re working with a tenant broker. It also keeps you from making an impulse decision you’ll later regret.
4. Negotiate the Lease
Once you find the perfect space, it’s time to negotiate the lease. This is where a tenant broker can really come in handy, as they know all the ins and outs of commercial real estate law and the loopholes to look for in leases. They can also negotiate on your behalf, changing things such as the length of the contract or add-ons.
In general, a lease for retail space tends toward a term of three years. You may or may not be able to negotiate that into less time. Some other things to look for include who takes care of maintenance, such as electrical, plumbing, heating and air conditioning. Find out if water and sewer are included, but expect to pay for your own electricity, gas and trash removal in most cases.
5. Do Your Research
Take the time to research the commercial real estate market in your area before signing on the dotted line. Talk to other lessees in the building or area you’d like to rent. Consult with a tenant broker to find out what things are negotiable and what isn’t. You can also do some online research, but don’t stop there. Talk to local business owners and find out what problems they’ve run into and what tips they have to offer. You may hear things you’d never hear anywhere else.
Tackling Commercial Real Estate
A little knowledge of the commercial real estate market allows you to hold your own when negotiating a lease for your new business space. Don’t be afraid to ask questions and negotiate for the terms that work best for your small business. A few hundred dollars a year might mean the difference in surviving when the economy is lean. Take the time to find the best deal for you and your employees.