In the extremely competitive commercial real estate market, every tenant client working with business real estate services hopes for rapid negotiations. Any company wants to conclude the search for a new location so they can begin the moving process as soon as possible. In reality, it is important for tenants to slow and avoid some common leasing mistakes. Before signing a lease, companies should consider the following important tips to ensure getting the best space possible.
Failing to Use A Tenant Representative
Before beginning a search for commercial real estate, businesses should seriously consider working with a tenant representative. Such a person working for the renter and representing their interests in this type of deal is one of the best ways for a person to obtain the best leasing arrangement while avoiding costly mistakes. Tenant representatives do not charge for their work, yet provide an invaluable service. This includes doing much of the legwork when searching for just the right space and negotiating the contract so the renter gets more of what they really want and need.
Not Leaving Enough Time
Leasing commercial space requires time to search for the right property and negotiate with the property landlord. It is essential for a company to allow adequate time to go through this process and avoid rushing through it. Lessees who put themselves in a position where they have to work against time to close the right deal lose valuable negotiating time as well as time for other things such as researching better properties and making necessary improvements.
Contacting commercial real estate brokers six months to even a year early in order to determine when the search for a property should begin gives renters the most options. It also allows them room to negotiate while still being able to move in plenty of time.
Not Negotiating the Upfront Costs
Upfront lease costs like security deposits and the payment of the first month’s rent can be a substantial issue for smaller companies with tight budgets. What many may not realize is these costs can be negotiated in a variety of ways to benefit the lessee. Security deposits and related costs are negotiable, just like most other parts of the contract. A tenant rep who provides essential real estate services can help renters negotiate these costs to minimize upfront outlay when this is a concern.
Failure to Observe Lease Notice Periods
From renewal dates to mistakes in the rental agreement, all commercial real estate leases have a variety of notice periods that lessees must know about. These periods provide time for the renter to consider options or report mistakes, so missing them is detrimental. Be aware of these notice periods and negotiate them with a tenant rep or commercial broker so nobody is caught off guard or has to pay penalties for failure to comply with the notice period.
There is no doubt that the process of finding and negotiating the best commercial real estate lease can be time-consuming and stressful. Despite the pressure that companies have to quickly sign a contract and get their business moved, it is essential that they be aware of these common mistakes that could end up being very costly. The best suggestion is to work with professional commercial real estate brokers who can look out for these issues and prevent them from becoming major concerns!