Wednesday, October 5, 2016

Before you sign that Commercial Lease...

Over that past 25 years we have leased numerous commercial spaces for our small businesses, and each leasing experience has been unique. In almost all instances, however, we were able to negotiate certain terms of our lease that helped our business financially

From free rent up front, to locked-in rates for an extension option, there is always something that can be negotiated such that both the landlord and the tenant benefit from the agreement. But you must negotiate these items before you agree to terms and certainly before you sign that lease with the landlord!

The challenge, however, is that most us don't have the experience or the real estate market knowledge to successfully identify the opportunities and negotiate a commercial lease. Your ability to negotiate more favorable terms is further diminished when you deal with the Landlord's agent directly - which is what you are doing when you work with the broker listed on the sign at the property you are leasing. That broker will treat you honestly and fairly, but they don't represent you - they represent the Landlord exclusively! 

Who can you depend on to represent you (the tenant) exclusively when searching for and negotiating a lease for commercial space? You essential have two options, or a combination of both. You can hire an attorney, at your expense, to help you negotiate the lease. Or, you can "hire" a Tenant Representative who has a responsibility to you exclusively and their commission is paid by the landlord. A professional commercial Tenant Representative focuses exclusively on commercial real estate and assisting entrepreneurs with their commercial site needs. 

This does not mean that we advise against consulting with an attorney before signing a lease or any other legal document - in fact, we strongly recommend that you do so. But when it comes to searching, qualifying, and negotiating the terms of a lease, we highly recommend that you engage the services of a Tenant Representative or Buyer's Broker.


Craig Melby, CCIM
In episode 43 of The How of Business podcast we had the opportunity to interview Craig Melby, an experienced commercial real estate investor and a Tenant Representative. He is the founder of LeaseSmart - they help growing companies find the best locations and negotiate the best deals.To learn more about Tenant Representation and valuable tips and advice you need before you sign a lease, we recommend listening to Craig's interview...

Read more at the Show Notes Page
[Listen on iTunes[Listen on Stitcher]





 

The How of Business Podcast show is focused on helping you start, run and grow your small business. Co-Hosted by Henry Lopez and David Begin, we discuss small business topics and interview other entrepreneurs and professionals. 

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