Often for small businesses, the appropriate size rental space is difficult to come by, but recently that has all changed. Today, small business owner who need rental space are finding landlords more accommodating than ever before. From top-tier office buildings to freestanding office buildings to strip malls, tenants who need small spaces are finding exactly what they need where they need it.
Finding the Ideal Space – Small Business Edition
- Do The Necessary Research. When searching for rental space, small business owners nearly always research the prospective properties they are considering, but often forget to investigate the stability of their potential landlords. In nearly every instance, small business owners should check out the property owner behind the rental property in question. In the same way that property owners research their tenants, tenants should research the creditworthiness of their landlord.
- Know The Market. Small business owners need to know and understand the market in which their business is operating which may mean working with a broker to get the ideal property for their business. Often small business owners believe leasing commercial property is similar to renting a home, but commercial leasing are more complicated, and a broker can insure the landlord doesn’t take advantage of the tenant. Understanding escalator clauses, expansions, renewals, guarantees, and termination rights is key to getting the right property and staying protected as a small business owner. When the property is found, the broker will negotiate on the tenant’s behalf, while a real estate attorney should be called upon to review the lease before signing.
- One Size Does Not Fit All. Small businesses can now find prime locations once reserved for larger clients. Property owners are often willing to divide large empty spaces into smaller ones to accommodate the growing number of small businesses.
- You Choose the Lease Duration. In the current real estate climate, landlords are more willing to negotiate than ever before. Gone are the days of the standard five year lease for commercial properties. Today, small business owners can find commercial leases from one to ten years and virtually everything in between. This can be particularly attractive to start-ups who are seeking the shortest lease term possible as well as for thriving businesses who may want to renegotiate a longer lease with better terms.
- Ask for Discounts, Concessions, and Allowances. Don’t assume lease prices are set in stone. Just like with any real estate transaction, small business owners should always try to negotiate the rental price. Though the monthly rental amount may not change, landlords will often offer additional tenant improvements, a short period of free rent, subsidized renovations, or limited rent increases. Tenants can often negotiate caps on annual rent increases or options to expand space if the business grows more quickly than anticipated. By simply asking, tenants may find landlords willing cover janitorial expenses, maintenance, garbage removal, management fees, repairs, and even additional parking spots.
- Expect to Pay a Security Deposit. Many landlords are concerned with risk and will not negotiate on security deposits. In most cases, ten percent of the total lease or a month’s rent is requested, though a small business’s creditworthiness can play a factor. In many cases, small businesses will be asked for letter of credit as well as a personal guarantee. The truth is, landlords don’t want to pay for tenant improvements or other concessions only to have a new lessee who is unable to meet the lease requirements.
Once you have found your ideal property, the professional team at Perillo Construction is ready to help you get the space ready, with the highest quality buildout on time and on budget, for the clients and customers of your small business.