If you are interested in buying a commercial space, it’s important that you understand the buying process and the ins and outs of commercial leases. If you have a better understanding of the process, you will be better equipped to identify certain areas of a commercial lease that may set you up for disaster later down the line.
Know the type of location you want to be in.
Through research, you may have been able to determine the areas that would be a perfect fit for your business, both physically and financially. During your search, you may think your dream location is too good to be true, and there could be reason for that. Make sure that you investigate into every area you are interested in. Find out what the zoning laws are, as well as attributes of the surrounding area, like local crime rates.
Determine what you will absolutely need for your space.
Depending on your business’ needs, there will be certain commodities that you will need to function properly. For example, if you are planning on opening your own restaurant, you need to make sure that the commercial space you are looking at will allow you to have a proper exhaust system. When you are looking for a space, it’s important to ask those questions in case, for some reason, it would be impossible to incorporate that certain feature into the building.
Always measure the area’s square footage.
Before you look at the property, you will be able to see these numbers to determine whether it’s even worth looking at at all. Once you see the property in person, be sure to measure everything yourself. There is something referred to as a loss factor, which is the difference between the marketed area of the property versus the useable size of the space. Sometimes, this difference could be up to 50 percent less than the footage you thought you were getting.
Ask to see the property’s previous utility bills.
This is information that you are entitled to, so don’t be afraid to ask for it. Utility costs vary wildly from property to property, so you should know what to budget for before signing the lease – or if you would be able to maintain these costs at all.
Demand a copy of the lease.
It’s important to, first, make sure that you are speaking directly with the landlord who you will be working with in the future. That way, you can be positive they are giving you accurate answers to the questions you are asking. Next, you want to make sure that you are reading over the entire lease before you sign anything. This is your time to check for any hidden expenses or information the landlord left out during your conversation.