Choosing an office space is one of the most important challenges that any new business owner faces. The process of commercial leasing, including the process of identifying, negotiating, and finally signing a contract, is a long process. Nonetheless, deciding on your first business home doesn't need to be a dreaded experience.
Consider the following steps to ensure that you choose the best space for your business:
Real Estate Parameters
Choosing the wrong office space can have detrimental impact not only to your business operations but also to your costs or mortgage payments. To avoid this expensive mistake, set your real estate parameters to serve as a guideline for the type of office space you intend to have. First, know the parameters for commercial property zoning. Choosing the proper zones for your office space narrows down the locations you'll check and makes the search much easier. Second, set the parameter for your desired size. Have an office that is too small and see your productivity levels less than optimal. Have an office space that is too big and see your operational costs suffer. An optimum office space typically measures 100 to 150 square feet for employee. Other parameters that you'll consider are location, accessibility, and neighborhood.
Types of Commercial Lease
For a successful commercial real estate venture, you also need to understand the three types of commercial leases: full service lease, net lease, and modified gross lease. Full service lease is the most common type for office space. Under this agreement, the landlord is responsible for all the expenses related to the property, including repairs and maintenance, cleaning services, utilities, taxes, and insurance. Net lease requires a lower base rent, but you'll share some of the expenses with the landlord such as taxes and insurance. A modified gross lease is fixed, and you'll be protected from hidden costs or unexpected taxes and other payments. However, you'll need to make a lump sum payment along with your monthly rent.
With or Without a Broker
Next, you'll need to decide whether you'll work with a broker or go through the process of commercial leasing by yourself. If you decide to work with a broker, you'll benefit from their accurate market pricing, knowledge of local market conditions, and negotiating skills. However, you'll need to pay for commissions and broker fee. Should you decide to work without a tenant broker, you'll have to find new commercial listings, make the visits, and negotiate the lease.
Finding your first business home might be challenging in the beginning. However, once you've already set your parameters, decide on the type of commercial leasing, and start walkthroughs with a broker or by yourself, it gets easier to finally choose an office space.