Top Tips for Negotiating Commercial Leases - #2 Decide What You Want

By
Commercial Real Estate Agent with REATA Commercial Realty, Inc. Texas 537349

Decide What You Want? Now I know this sounds crazy, but trust me, it can be much harder than you think. Especially if you have multiple decision markers. But it's a crucial second step. Since occupancy costs are typically the second-highest expense for most companies, you can't afford to get it wrong. Commercial lease terms average five years so they are a fixed cost that aren't easily changed during that term.

So what do I mean by deciding what you want and how do you do that? First and foremost, identify the company's goals and objectives. For example, does the company plan to expand or reduce its workforce? If so, when and where? Will new offices be created over time? If the company's survival is contingent on underlying contracts with customers, what is the length of those contracts? Do customers come to the office and what image does the company want to project? 

These are just a few of the questions that the company needs to answer before it can hope to find the appropriate building and space.

But other questions will come up.

What area of town is best for the business? Why?

Do employees come and go throughout the day or do they stay at the office?

Are you going to change the way the office is configured as a result of the latest reorganization?

Are you going to enforce company standards for office size based on the org chart?

Are you going to lease extra space to allow for growth during the lease term?

Is visibility from a major street or highway important and do you require signage on the building?

Does it matter if the company is located in Plano, Frisco or Dallas? Is the address important?

I could go on, but I think you get the idea. If you don't know where the company is headed and you don't know why it exists and what's important to its future survival, you can't possibly make the right decision on an office lease.

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_________________________________________________________________________

Bob Gibbons

REATA Commercial Realty, Inc. | 1211 E. 15th Street, Plano, TX  75074

972-468-1946 p | 866-439-8015 f | 972-984-8580 m

bob@texastenantrep.com | www.TexasTenantRep.com

 

 

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Rainer
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Nancy Fraser
Exit Realty Premier - Massapequa Park, NY
Realtor, Massapequa Homes for Sale 516-729-0278

Hi Bob

I have been dabbling in a little Commercial lately and it is good to see some educating material.

Thanks for the post.

Jan 20, 2011 03:47 AM #1
Rainmaker
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Jason Smith
Crye-Leike Realtors - Fayetteville, AR

I have found that you have to learn the owners actual business.  The in's and out's as it were.  I now know more about day care, church business, medical, photography, and more...than I ever thought I would need to know just because of asking the questions.

Great post.

Jan 20, 2011 03:48 AM #2
Rainmaker
48,881
Bob Gibbons
REATA Commercial Realty, Inc. - Plano, TX

Thanks for your comments, Jason and Nancy. Starting with the client's goals is the key to really being of service and not just a money-grubbing broker. Glad to hear that there are others out there with the same attitude.

Jan 21, 2011 03:35 AM #3
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Rainmaker
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Bob Gibbons

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