If you are a home-based business looking into a "brick and mortar" location or a small business that has grown out of their current space, finding and leasing a new commercial space may be a 2014 project on your plate. For any business owner not fluent in lease types and terminology, the process of researching spaces and navigating a lease may seem daunting. However, answering a handful of questions and knowing a few terms before beginning the process can provide focus and reduce apprehension.
Questions:
What can you afford? Generally, rent should be less than 10 percent of projected annual gross revenues.
*Word of caution: Make sure you know what type of commercial lease will be signed. For example, a Triple Net Lease is also known as Net Net Net Lease or NNN Lease. This is a type of lease in which the tenant pays all or part of the taxes, insurance, and maintenance associated with use of the property. These fees are paid in addition to the tenant's regular monthly rent. Another common type of commercial lease is a Modified Gross lease which usually stipulates that the Owner or Landlord is responsible for the major expense items, but the tenant is responsible for their directly related expenses (i.e. electricity, phone/internet).
Of course this depends on the type of business you own. For office space, the average is 200-250 sf per employee. For retail space, the square footage is based on annual sales and market data of average "sales-per-square-foot". For industry space, position of equipment, processes, and inventory affect the square footage needed.
Where do you think your business will thrive? Location is key to any business. You want to be near complementary businesses that are making money, but not right next door to a competitor. Is the location easy for you and your employees to commute to or your clients to find?
Does your type of business require specific zoning designations? Exposure and signage - how many cars drive by a day?
How long do you want to stay in an area and how fast you think you will grow? Tying yourself to a 10 or even 5 year lease may not be the right choice for your new or growing business. Negotiate a shorter lease term.
Once you have an area and rental rate in mind, your broker can begin making appointments to walk-through suitable spaces. When visiting spaces, be mindful of the building, landscape, and parking lot's condition; evaluate the surrounding vicinity and always carry a checklist with important must-haves (i.e. internet ready, signage, parking spaces).
The Management Group can help you find the perfect space, and also be in your corner during negotiations and signing. To speak with a TMG broker about commercial space, call Carmen Villarma or Jennifer Riddle at (360) 397-0334.
http://www.TMGnorthwest.com
