Armed with a great business idea, looking for the perfect retail space for the new business venture may be difficult. What are the things that need to be focused on?
Ask the following questions::
- Who is the landlord?
- How long has the landlord owned the retail space/property?
- Is the landlord accessible? Where is he/she located?
- Is the property manager accessible?
- What is the infrastructure/building’s history?
- Who handles/manages the leasing of the property?
- Who were the recent tenants that occupied said property?
- Who takes care of repairs?
- What is included in the lease?
- Is an “out” clause included in the lease agreement?
Who is the landlord?
Different rental space landlords require different considerations and negotiation techniques Knowing the landlord, whether a private individual, a small independent landlord or a large institution, such as a bank, will help one prepare for future issues.
Dealing with larger institutions can prove to be challenging as processes are considerably slower, such as dealing with the necessary paperwork. Decisions and matters concerning prospective retail space may go through a long deliberation and decision-making process by their board or committee f
Small independent landlords or private individual landlords are more accessible. They are local and can make themselves easily available to attend to queries and concerns regarding the retail space.
How long has the landlord owned the retail space/property?
Most landlords, especially commercial space landlords, have been in the industry for at least 10 years. These established landlords keep the property for long-term purposes, such as increasing value or reselling the property for higher profit. Seasoned landlords know more about the prospective rental space, the building, the area and location, and all the other relevant information.
New landlords who have less than 10 years of experience may know less about the rental space or building that a business owner is interested in. Most new landlords who have just started their business might still have building mortgages, charging their tenants higher than the average or usual market rents to cover the mortgage cost.
Is the landlord accessible? Where is he/she located?
Check on the prospective landlord’s location and availability. Does the landlord live or hold office near the rental space? If not, what are the other means to contact them?
Most out-of-town or out-of-state rental space landlords may not be able to respond to inquiries and concerns quickly and conveniently. Local landlords who have their residence close to the retail space for rent can be faster.
Is the property manager accessible?
Another thing to consider is whether the property manager is readily accessible. Having a close physical location to the retail space can mean that property managers can quickly and appropriately address and attend to all queries and concerns.
Also, consider if the r property manager handles more than one site? If yes, when do they attend to the specific site—as in which days of the week and which times of the day? Knowing this makes it more convenient for the business’ daily operations.
What is the infrastructure/building’s history?
The age of the building matters. In most cases, older buildings tend to require significant and frequent maintenance work, which means more expenses.., However, newer buildings may not be the best location for the business. Weigh lease options, check budget, and decide which rental space is appropriate for the new business venture.
Who handles/manages the leasing of the property?
Most small, local, and independent landlords handle the leasing themselves. Other landlords may engage the services of an in-house staff or a real estate agent. The prospective landlord, the in-house leasing staff, and the real estate agent can have different motivations on why they want to close the leasing deal with a certain business owner. Negotiate a deal that may bring more benefits to the new business and lessen personal liabilities.
Who were the recent tenants that occupied said property?
Ask for contact information on recent tenants that occupied or are occupying the commercial property, especially if it’s a multi-unit. Talk to these tenants because this can build professional rapport and bring information about their lease negotiation experience.
Take note of any relevant detail that can help craft a negotiating strategy that makes sure that business owners are signing a lease agreement deal maximises benefits and prevents business owners from incurring unnecessary liabilities.
Who takes care of repairs?
Never assume that all repair work and costs fall completely on the landlord. Some commercial lease agreements may not specifically state that repair costs should be the landlord’s responsibility by default, so business owners should make sure this is specified and spelled out in their own lease agreement.
What is included in the lease?
Initial lease agreements provided by landlords protect their interests. Thoroughly review, understand and revise it within legal capacity as a tenant to come up with a mutually agreed-upon lease arrangement that is mutually beneficial.
If the landlord’s interests are protected, the interests of the business owner should also be represented and honoured. Consult with a trusted financial advisor, accountant, and/or lawyer to assist in understanding unfamiliar terms in the lease agreement and enlightening decisions and possible course of action to take to further the business’ interests before the finalisation of the lease agreement.
Is an “out” clause included in your lease agreement?
An “out” clause in the lease agreement specifies the terms to allow business owners to get out of the lease if the business outgrows the commercial space or if unforeseen eventualities cause a cessation of business operations.
Negotiate well and thoroughly. Some landlords allow tenants to terminate the lease without penalty, as long as one tenders an advance notice of termination.
Leasing a commercial retail space is as challenging as it is exciting. But with preparation, sound professional advice and guidance, and lots of guts, finding the perfect commercial retail space that best fits daily operation demands and long-term business goals is easy!