If you own your own business, your dream is to have it succeed and grow. Perhaps what started as a side hustle for you, like your own technology consulting firm, now is ready to become a full-fledged effort, with more employees and a space to operate from. Before you negotiate a commercial property lease, you should keep in mind the following five tips:
- Do your research. You want to know if your business will be a good fit for the area you are interested in leasing in. Location means a lot to see your business thrive, so being in the right area, with the right kind of access for potential customers, matters. If you are going to open a local coffee shop, you want to make sure your location has easy-access parking and even a drive-up window and isn’t right next door to a competitor’s. Your location also will be vital in determining what amount of rent is fair compared to similar properties.
- Find out more about a building’s owner and landlord. You want a good working relationship with the person you are leasing from and a landlord who responds to any problems. You also want an owner whose financial situation is more secure—so you can avoid getting evicted if they can’t maintain ownership. You can find out more about an owner’s financial situation through public records or in documents related to their membership in an LLC or business entity.
- Find out your local zoning laws. You want to lease a space in a local zoning area that will support your business. You don’t want to find out after signing a lease that that cool old home you want to turn into your counseling practice isn’t zoned for commercial use.
- Plan for growth. No one wants to move into an office space and a year later need to move again to accommodate growth. You should lease a space that you think will fit your business (or has space to expand) for at least a few years.
Work with an experienced commercial real estate attorney. An attorney can make sure your commercial lease outlines specifically what costs you have to pay, how long the lease is for and how the lease can be transferred in case you need to move to a larger space or shut down. Commercial leases can be complicated, with some covering utility and insurance costs and others not. You want to make sure an attorney helps you know exactly what you agree to in a lease and to negotiate it further if needed.
