If you’re planning to lease commercial space, you’ll need to be very strategic in your approach in order to get the best terms in your lease agreement. First and foremost you’ll want to start with a budget. We’ve listed some helpful #cre budgeting tips below.
Rent:
This is obvious but just one component of your budget. Your tenant advisor will know current rates for the particular property type and submarkets you’re considering and whether you can expect an annual increase.
Moving costs:
Budget for the costs associated with moving furniture and equipment, including IT, as well as the costs of moving your people.
Tenant Improvements:
Some landlords may provide an allowance to offset your tenant improvement costs but it may not be enough to cover it all which would include architectural fees, construction management fees and permit fees.
Parking fees:
Depending on your submarket, parking may or may not be included as part of your rent. Your tenant advisor can negotiate the best possible terms for your parking and also help you determine if your parking is adequate for your needs.
Communication costs:
You will need to budget for internet and phones.
Other Costs:
With anything other than a “full service” lease, you may be responsible for other costs including but not limited to the following:
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- Utilities; You may be responsible for your own utilities usage such as electric, gas and water.
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- Maintenance; Make sure and understand your maintenance requirements, specifically as it relates to the heating, ventilation and air conditioning system. You may be responsible for maintaining, repairing and/or replacing this equipment if necessary.
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- Cleaning costs; The cost of cleaning your offices should be budgeted for since some landlords provide cleaning services and others may not.
- Property Taxes, Property Insurance & CAM; You may also be responsible for paying your proportionate share of the landlord’s property taxes, property insurance and common area maintenance (CAM).
Understanding your rent and lease costs is a challenging process. Working with an experienced commercial real estate advisor specializing in tenant representation can help to ensure that you have access to the right tools and knowledge to be able to calculate your costs and what exposure your company could have both in the near and the long-term. Give us a call at 314-821-0085 or send us an email doug@howardcommercial.net
