Leasing Commercial Real Estate
The Basic Guide To Leasing Commercial Real Estate
Commercial real estate leases come in many shapes and sizes which can make leasing a commercial property daunting. You do not want to be caught in a long-term lease that is not working for you. This is why you need to know how to lease commercial real estate correctly.
Set Out Your Parameters
The first step in commercial real estate leasing is to set out your property parameters. You need to take the time to do this because there are many different commercial properties that you will be able to lease. If you do not know what you are looking for, you could be overwhelmed by the properties on the market.
When you have a list of the parameters, you will be able to limit your search to only the properties that will work for you. There are certain factors that you need to consider when you look at commercial real estate including the property type and zoning, the size you need and your budget. You should also consider the accessibility of the property. You can easily find such type of property in Cincinnati, Ohio.
When you consider the zoning of the property, you will have to ensure that the property zoned for your use. If you are looking for a warehouse, you should consider one that is zoned for industrial use. Another commercial zoning that you need to know about is the property that is zoned for retail, offices, and restaurants.
Find A Reputable Commercial Real Estate Broker
There are 2 types of commercial real estate brokers that you will face with commercial properties. The leasing agent will be the broker that represents the landlord and will not be looking out for your best interests. You need to work with a tenant broker because they are going to have your best interests in mind.
It is important to note that you do not have to use a tenant broker to find the commercial real estate for you to lease. However, having a broker will help in a number of ways as they have better access to the commercial real estate market. They will also have access to market pricing and competition data, knowledge of the local market and the negotiating skills that you need to get a lease that will work for you. You will generally be able to get all of these benefits essentially for free because the landlord will cover the tenant broker’s fee.
When you are looking for a tenant broker, you need to ask them certain questions. The first question will be about their experience with your particular commercial property needs. You should also consider the size of the broker’s practice because larger practices may have better access to the market.
You should also ask about how the broker will be compensated for the work that they do. It is recommended that you find a local commercial real estate broker because they will have a better understanding of the local market.
Understand The Different Commercial Leases
- There are different types of commercial leases that you can get, but they will generally relate to the type of business that you have. Full-service leases will generally be the best for tenants because they are all-inclusive. You will have to pay a monthly rental amount, but this will generally cover utilities and other services such as janitorial services.
- Triple net leases are the ones that tenants like the lease because they protect the landlord more. With these leases, you will have to cover part of the operating costs of the property and the utilities. These leases are generally used for businesses that are considered utility heavy such as manufacturing.
- Percentage leases are ideal for seasonal businesses which as retail stores that sell items which have high demand at certain times of the year. With these leases, you will have to pay a base rent and a percentage of the sales volume for the month. This will leave you paying less in the low demand months and more in the high demand months.
- A modified gross lease will be a good compromise for utility heavy businesses and the landlord. With this lease, you will be able to negotiate terms that work for your business and the landlord. The rent on these leases will be fixed and you will not have to worry about any surprises when it comes to paying.
Conduct Multiple Walkthroughs
Before you agree to lease a commercial property, you need to conduct multiple walkthroughs. When you conduct these walkthroughs, it is recommended that you take your broker with you. Most business owners will do a walkthrough of around 4 to 10 different properties that will suit their needs. This allows you to understand the average price and will give you an edge when it comes to negotiations.
There are many steps that you have to complete when you are leasing commercial real estate. You will need to determine the parameters of the property and understand the different types of leases.
All you must do is to hire the best property management company to take all your pain.