Business Real Estate

I had a delightful conversation at Starbucks yesterday with Laura Malone, a commercial real estate representative. I wish I had known, years ago when I was leasing office space, what I know now after talking with Laura.

It is key is to plan well in advance for both moving to another facility or even renewing your present lease. Minimum planning period is six months and ideally you should be planning a year in advance. If you do what I always did, you file lease when it is signed and forget about it and its terms until the owner approaches you about renewal. The owner is now in the driver’s seat, as you have little recourse but to renew the lease on the owner’s terms, or move out. But you probably don’t have enough time to find a new space, negotiate a lease, make provisions for build-out and moving phone services, and move.

Laura suggests getting in touch with a commercial real estate broker about a year before the lease expires. This will usually cost you, the renter, nothing, as the broker is compensated from a split of the commission paid by the owner. Let the broker help you assess current and future needs and either negotiate with your present landlord or, if your needs dictate, find a new location. With assistance, you may realize a savings of 10 percent or better.

While the commercial real estate market has not suffered to the extent of the home market there are, in most areas, plenty of vacancies that need to be filled. Owners are open to negotiation and brokers know which buttons to push.

So if your lease expires in a year or less, do yourself a favor and talk with a few commercial real estate representatives and find one you are comfortable with. Then let him or her be your advocate.

Finally, before you sign whatever lease is negotiated, have your attorney also review it and advise you. After all, when you sign a multi-year lease, your may be committing to paying hundreds of thousands of dollars or more.