howard commercial Archives - howardcommercial

How to Craft a Flexible Lease

Even if you have a clear vision for your company and a smart strategic plan to help you get there, the future is unpredictable. The office space that’s ideal for your needs today could end up being a less-than-perfect fit before your lease expires. Making your office lease as flexible as possible is a way to hedge against this unpredictability. Here are a few of the ways that you can create a more flexible lease: Consider a Shorter Term “Short-term” lease is a relative term. For a tech startup it might mean month-to-month. For an established law firm it might…

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Looking for Office Space? Follow These Tips

Whether you're looking for your first office for a start-up, are opening a second office or need to relocate, the idea of finding the perfect space can be overwhelming. To simplify the process, follow these tips as you begin to consider office spaces. 1. Start with Location Before you start looking for new office space consider what you need at your new location. Is it advantageous to be in a part of town where businesses similar to yours are located? Do you need to be close to clients or others you do business with? Without question places that are easily…

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Relocating? A Guide to How Much Time You Need

Market conditions, the size and complexity of the transaction, and option notice dates can help determine when to begin the process of evaluating your office lease. Time should be your ally, not your enemy during negotiations with any landlord. Landlords know that other buildings you’re considering will most likely have to create a space plan, get construction pricing, agree on a rental rate, prepare and execute a lease document, apply for construction permits and prepare the space for occupancy. This is, at a minimum, a 4 to 6 month process. So a tenant who waits until there are only…

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WATCH OUT!…THE DEVIL’S IN THE DETAILS

The Restoration Provision When reviewing a multipage, landlord-centric commercial lease it’s easy to get glassy-eyed and often overlook seemingly harmless language. The restoration provision, usually tucked away under the Surrender of Premises Clause in your lease, is a perfect example and could be a potential tripwire hiding in plain sight. It’s a legal obligation for a tenant to restore, at the landlord’s request, the premises back to the condition it was in before you moved in or remove alterations and improvements as the landlord sees fit. This could be a very expensive parting gift to your landlord should they exercise this…

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Commercial Real Estate Lease vs. Purchase

The purchase side of the lease vs. purchase equation usually comes into play when your company's needs are fixed and predictable for the long term. If you know that your needs won't change for at least a decade or more, purchasing can be a good option. It gives you total control over your space and a great deal of certainty over cost and what you can do with the space since, after all, you own it. Is it best to lease or purchase commercial space? The type of business you have, your future goals, your financial resources and the conditions…

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Signing a Lease for Commercial Space? Follow These Tips

Many times, finding the right space for your business is the easy part. Negotiating a commercial lease, on the other hand, can be quite difficult. Follow these basic guidelines to avoid signing the wrong lease. 1. Consider the Length of the Lease Keeping you in your space for a longer period of time is something landlords encourage because it’s advantageous for them. There are some instances where a longer term lease is a smart business decision for your company - you may be able to save big on your monthly rent. On the other hand, signing a lease…

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Questions to Ask Before Choosing Your Commercial Real Estate Advisor

Choosing a commercial real estate broker/advisor to serve as your tenant representative can be a challenge. Asking the right questions can help determine whether or not a broker is a good fit for you. Here are six good ones and some guidance on what to look for. 1. Does your firm focus exclusively on tenant representation or do you also represent landlords? If the answer is “we represent both” then there is an inherent conflict of interest. To insure that your best interest aligns with that of your advisor, choose a firm that focuses exclusively on representing tenants. This eliminates any…

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The 3 Most Commonly Used Leases in Commercial Real Estate

There are 3 basic types of leases used in Commercial real estate. They are all complex documents but can be understood when you have some background about the terminology associated with each of them. The three types of leases are: 1. Gross Lease With a gross lease, also known as a full service lease, the rental rate includes all of the operating expenses for a property, such as the utilities, maintenance, property taxes and property insurance. If these expenses increase over the term of the lease, the landlord typically passes through the incremental cost to the tenant as “additional rent”. Many…

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Did I Budget For That?

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…

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What is CRE Dual Representation?

If you’re involved in any leasing/purchasing real estate process it’s likely you’ve come across the term “dual representation” and it’s basically this: dual agency representation happens when the same broker or firm represents both the tenant and landlord in the same transaction. It’s common to find this happening when big firms are involved in the process. What might seem like an ideal solution at the time can cause problems during the transaction because it’s not possible to represent both parties fairly in dual representation real estate transactions. There are too many conflicts of interest between the tenant and the landlord.…