If you are planning to lease a commercial property, you probably already know that the process is going to be a bit more complicated than the process involved in acquiring a lease on a residential property. In addition to selecting a property that will serve as an efficient, convenient space for your business or retail operation, you will also want to consider existing regulations for the structure or area, potential competition from similar businesses, physical location, and other factors.
Taking time to gather facts and seek professional advice about each commercial property under consideration is a good way to narrow the search. Those who may be preparing to lease a first commercial property can use the following information to help ensure they make the best possible choice for their needs and goals.
Lease type and potential for negotiation
The type of lease being offered is a critical factor that every potential tenant should explore during their search for a commercial rental space. Lease types typically are based on the following definitions:
- a gross or full-service lease is when the tenant pays a fixed lease amount each month and the landlord retains responsibility for all expenses, including utilities, insurance, and property maintenance and repair
- a modified gross lease is when the tenant pays a monthly lease amount while also accepting responsibility for paying some expenses during the lease term, such as a portion of the utility bill or maintenance fee
- a net lease is when the tenant agrees to pay a basic rent amount while also being responsible for paying some or all of the costs associated with the space, such as utility bills and proportional shares of costs related to maintaining the building or common areas
Tenants should remember that lease types serve as a general guide and may be subject to modification by negotiating the terms with the commercial property owner.
Build-to-suit or potential for modification
When prospective commercial tenants have difficulty in locating a good space to rent, they may want to explore available properties that offer a build-to-suit or other modification option. Opting for this type of property can be a long process due to the projected time frame needed for planning and construction, but often provides a more perfect fit for the commercial tenant's needs.
Utilizing the skills and experience of a professional realty agent who specializes in the leasing of commercial properties is the best way to successfully navigate the commercial real estate market and ensure that you select the best property for your needs. To learn more, take time to discuss your business and location requirements with a realty agent in your area.