When considering commercial property and the build out which often follows, there are certain points to make sure you are clear on before proceeding. After all, once you have signed the lease for a commercial space – office, retail, or other – it is too late to make changes. Here are some tips to help you ensure you get exactly what you are looking for – or at least as close to it as possible.
Point One: Understand the Lease Agreement
It is not enough to simply read the document word for word, but you need to understand it word for word. Often, landlords use “standard” leases which have “standard” language and terms, so if you have negotiated specifics outside those “standards” you need to make sure those terms are included. Know the language in detail and ensure your terms are there as well as what obligations you must meet according to the lease. If you see any provisions that are unacceptable, list them for the landlord, and work to negotiate the best deal for you and your business.
Special Language: CAM (Common Area Maintenance) Terms – While CAM terms may be among the most confusing language in the lease, your goal is to see that you are only allocated a percentage of the CAM fee based on the portion of the building you are renting. Your CAM fees should not vary based on how much of the building your landlord has rented at any given time nor should it include any marketing or legal expenses of the landlord. You’ll also want to strike administration fees over three percent, build-out costs for other parts of the building, and any unexplained fees. Also, make note of when and how CAM fees are increased.
Capital Expenditures: These major structural costs – roof, HVAC, foundation, etc. – are often tossed into a commercial lease. It is in your best interest to avoid a lease which puts the burden of replacement or repair on you, the tenant. Instead, negotiate a lease in which you are only responsible for repairs up to a reasonable annual amount.
Once you have negotiated the best lease possible, it is in your best interest to have an attorney review the document before signing. A qualified attorney can even help you negotiate terms in your favor.
Point Two: Understand the Build Out
Before the commercial renovation or build out of your newly leased property begins, there are several points to ponder. Zoning is number one, as before you can start, you have to comply with local zoning ordinances otherwise, you will need to seek a variance from the zoning board to move forward.
Codes come next and like zoning, you must conform to codes – electric, mechanical, fire, plumbing, safety, etc. Meeting these local codes mean planning before any work begins. During the planning phase, you’ll need to consider the size of your property. Can it accommodate your plans? You want to avoid work stoppage because code and zoning laws are not met, as well as mistakes which require a tear down and re-do to be in compliance.
As you plan, you also want to consider the neighborhood in which you are locating. Will they welcome your business? You can help by integrating your property with the architecture and style of the community into which you are moving. And finally, timing and budget are significant. Set a realistic timeline for your build out to be completed. Communicate up front with your contractor regarding timelines and budget as well as why you are setting those deadlines for your business. Keep in constant communication with your contractor so that changes can be addressed quickly and efficiently to ensure the completion of your project on time and on budget.
At Perillo Construction, we have the knowledge and expertise to make your build out is a success. We promise to deliver – with exceptional quality, superior customer services, and on time scheduling that is within your budget.