St. Louis, MO 63122 | (314) 821-0085 |  doug@howardcommercial.net 

Common Mistakes to Avoid in Commercial Real Estate

Many companies have the view that leasing commercial property is a lower risk than purchasing property – there are fewer worries about depreciation, taking on debt and other concerns when you’re using space without buying it. While it may be true that choosing to lease your office space or building spares you from certain worries, there are still risks involved. To help ensure that you choose the best space and get the best possible leasing agreement, be sure to avoid these deadly, all-too-common commercial real estate mistakes.

Going in Blind

You would never think of purchasing commercial real estate in an area without researching the market. After all, you want to make sure that you’re paying a fair price for the property and that you’re buying real estate in a prime location that will appreciate over time.

 Even though most people understand the importance of market research when buying commercial real estate, a shocking number of companies fail to do their homework and learn about the market trends when they’re leasing. If you don’t do some legwork and learn about the area, you’ll have no idea what rent per square foot is fair, what amenities are common, what concessions are common and which companies are located nearby that could help or hurt your business.

 Acting on Your Own

Many companies choose to search for properties and negotiate with landlords all on their own. As a result they end up with commercial real estate leases that are overpriced or properties that don’t fully meet their needs. Enlisting the help of a broker who specializes in tenant representation can help ensure that you get a fair lease agreement from your landlord. Brokers are also very skilled at helping companies find spaces that aren’t just acceptable, but are instead the exact right fit for their needs.

 Not Considering Future Needs

When searching for commercial real estate spaces to lease, you can’t afford to be nearsighted. While you want to find a space that will meet your immediate needs, it’s important that you also consider changes that could occur within the lease time period and how they might affect your needs for space. If you foresee an expansion or reorganization in the not-so-distant future, you’ll want to ensure that the space you choose can accommodate your changing requirements.

 Failing to Understand Lease Terms

Lease agreements are long and complicated, but never make the mistake of signing one without fully reading or understanding the terms. If you don’t understand the language, ask questions and make sure you’re fully confident that you know what you’re getting into before you put pen to paper.

 Waiting Until the Last Minute

Many companies underestimate the amount of time that it will take to find the right commercial space, negotiate the lease and build out the space. Don’t wait until your current lease is just weeks from expiring. Start early so you have plenty of time to research and negotiate with your prospective landlord.

howardcommercial is a commercial real estate advisory firm focused exclusively on representing tenants, owner-occupiers and investors. Please feel free to contact us at 314.821.0085 or doug@howardcommercial.net to discuss your real estate requirements.

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