Practice Due Diligence before Signing a Commercial Property Lease

Handshake of a client and a real estate agent

Starting a new business requires a lot of work, such as choosing a location and finding and securing a commercial property. It’s one of the most important parts of setting up your business, in fact. So, work with an agency you can trust to help you navigate the complex and fierce commercial real estate market, advises

You still need to do your part and acquaint yourself with the industry on your own, however. It’s important to be involved in the buying process.

Familiarize Yourself with the Commercial Real Estate Jargon

Learning the terminologies used in commercial real estate leases is vital to understanding your location prospects. Remember, you can’t leave the entire property hunt to your agent. Even if they handle the talks, you can commit to a transaction for confidence if you know what they’re talking about.

One important term to know is “common area maintenance” or CAM. These are building areas which you don’t lease directly but are a common responsibility among all tenants, such as hallways or lobbies. Take note of the CAM section of any lease to ensure you’re not paying for more than what is reasonable.

Consider the Factors that Affect Rent Fees

Shopping for a commercial space would be easier if you know which factors affect your lease payments. Prioritize checking these factors when considering a potential property to make sure you won’t be surprised by additional fees.

Sit down with your agent, go through all the points you need to consider, and make a list. Elements that may affect your rental fees include the chargeable square footage, calculations for rent increases, cost of improvements, and the security deposit.

Review All the Paperwork

Once you’ve decided on a commercial property to rent, review all the lease documents and check the details stated in it before signing. Inspect the terms, such as the start and end dates and any conditions you may have negotiated.

Moreover, hire a lawyer to examine the document if you can. It’s best to have a legal professional examine the document to avoid missing items and protect your interests.

Carefully considering your commercial real estate options requires basic knowledge of the industry. Take note that practicing due diligence is a contributing factor to the success of any business venture.