In talking with countless prospective tenants working in the commercial office leasing industry since the 2000’s, I realized that there is a huge misconception of what the ultimate goal of a business is when it comes to leasing. Most people think the goal is to find a great affordable space in a desirable building located in the right part of town and to ultimately sign a lease. But that is only half of what needs to be accomplished.
Once the lease is signed, the result every business owner or decision maker should strive for has not been gained yet. The ultimate result is to be able to come into your office, kick your feet up on your desk, and feel truly at home at your office. Studies show that we spend over 30% of our waking lives at the office; so choosing the right space takes careful planning, education, and typically a good tenant broker.
Getting the help you need
A good tenant broker is a market expert, who knows the leasing landscape of a specific region or several regions. They know who the good landlords are, what spaces are available that aren’t listed online, and market comps for things like electricity costs and other me what “hidden” costs that are in a commercial lease.
We’ve heard horror story after horror story about business owners rushing to sign a lease, getting moved in, and then finding something terrible about the space they just committed to for three years. The only way to avoid that situation is to follow these steps:
- Don’t just rely on online listings and call the landlord directly. The landlord wants you to be uneducated and prefers that you not have a tenant broker helping you.
- Try to learn a few commercial leasing 101 facts so you have an idea what to look for. Here’s a great place to start! New Tenant Leasopedia
- Hire a tenant broker to help you on your search. You don’t want to go it alone, you can’t possibly have all the data required to make an informed decision. A good tenant broker is your shepherd and they get paid by the landlord, not you!
- Do not sign over a three year lease. Most landlords will try to lock you in to a contract as long as they can, but you can always walk away. You should not let anyone but pressure on you.
Don’t go it alone. It can be a tough process, but there is help out there. Remember, the dream isn’t to sign a lease at a good rental rate. The dream is kick your feet up on your desk and be surrounded by great office space for your business!
Do you have any more commercial real estate tips?
Justin Lee is co-founder of The Square Foot. The Square Foot is a website that connects businesses with
local real estate agents who have insider market information that you won’t learn from listing services or landlords in the Houston area. Justin is a licensed real estate salesman in Texas and has worked in commercial real estate since 2000. For more discussion and help with finding and renting space for your business, be sure to check out TheSquareFoot.
I just made that mistake, recently. Got a new office space with huge outstanding electricity bill, and the landlord turns deaf ears. I will be more careful next time.
I just read where a local company is doing away with lease because of its cost and the fact that the land lords are asking for not just 3 years but for 10-12 years. I worked for a business that is closing all its store that are “leased” and moving toward owning their on own free standing building. Looking at this from a small business owner (cake business) perspective what are your thoughts on finding a small building you can buy or build out vs leasing a building.