Leasing Commercial Property
The Tartan Way
The decision to lease new space is driven by many different factors—the need for growth and expansion, a desire to upgrade the quality of your space, or possibly, improved access to mass transportation. No matter the motivation, the process you undertake to select and secure new space is the same. By following these basic steps in TARTAN’s leasing process, you are most likely to find the building or space that fits your company’s overall requirements.
Preparation
Once you decide to look for new space, the temptation jump on the internet to look at properties immediately and call listing brokers may be strong! We will help guide you through the process that will save you time, money, and unnecessary headaches in the long-term.
- We begin with a needs analysis to determine as precisely as we can what you are looking for in the new space. We will ask you about your business model and culture; we’ll need to know how many full-time employees you have, the type of space required, the feel you want, how you will use the space, and any major “must haves.” Through our conversation, we will help you drill down to the requirements that are most essential.
- Next we’ll work on the budget considerations. Leasing space, particularly if it is your first, is likely to bring a few unanticipated and hard-to quantify costs. Also, depending on the type of lease structure offered, you may have other costs in addition to the base rent. We will make sure we have a clear understanding of your financial picture—working capital, credit strength, revenue projections—so that we can best guide you.
- Along with your budget, we will want to know if you have any remaining lease liability at your current location. Will we need to sublease your existing space for the remainder of a lease, or try to negotiate a lease termination with your current landlord?
- On many larger or more complicated projects, we recommend you assemble a leasing team before you begin touring buildings. You may want an architect, space planner, general contractor, and a real estate attorney lined up so that the process can proceed quickly. We can help you find the right professionals to partner with so the process is not slowed or halted while you look for these team members.
The Search
Once there is clarity and parameters around your space requirement, the search process can begin.
- We will perform a comprehensive market survey and build a list of appropriate, available spaces that meet your requirements. The list will be comprised of on-market properties you might have seen online as well as properties listed only through industry websites. In addition, we may have other off-market properties that we know of based on our connections in the community. Our ability to bring you the most comprehensive list of opportunities is one of the ways in which we provide the greatest value.
- We will organize site visits of preferred buildings for you and your executive team. With our experience, we will be able to help you evaluate the properties we tour. In addition to paring down the list of properties, the tours will refine the needs you previously presented. This process helps us move more quickly toward the best possible selection.
- To understand if a particular space can fully meet for your needs, we will assist in getting a test-fit by a space planning architect for the preparation of preliminary layouts. In many instances, building owners provide architectural services at no charge to assist perspective tenants in performing such analyses.
- Looking more closely at the numbers, we will analyze the leases that are offered to you and factor in the type of lease—full service, triple net, modified gross—and calculate what the total occupancy costs will be in each space. We will help make visible all the costs associated with different properties—utilities, taxes, operating costs, and so forth–so you can make an apples-to-apples comparison of your options.
Proposals, Leases & Negotiation
Once you’ve narrowed the options, TARTAN will help you move to the next stage of the process. Though it’s tempting to speed ahead towards signing a lease, there are still critical steps to go through:
- We will solicit formal proposals—also called letters of intent—on your behalf from one or more building owners. The proposals will outline all the basic economic and business terms that will become the framework of the lease agreement. The more specificity we include, the less likely there will be confusion or misunderstandings when we draft and negotiate the lease agreement.
- It’s not just about the rental rate. There are many other elements of the deal that will materially impact the overall worth of the deal to your company. These include options to renew, rent concessions, options to sublease, tenant improvements, rent concessions, and timing of payments, among others. While it is easy to focus tightly on the rental rate, we will help you keep the larger picture in mind.
- We believe it’s always good to have a back-up option, and we will encourage you to pursue more than one property at a time. This might mean requesting several LOI’s at the same time.
- Once you have signed an LOI, the remaining items for lease negotiation will be fewer and the process should go more smoothly. With TARTAN on your side, you will have the market knowledge and negotiating expertise to get the best possible deal.
Build-Out and Move-in
Once your lease is signed, we still have work to do! Depending on the readiness of the property, TARTAN will stay with you until build-out or other improvements are complete.
- When needed, TARTAN will supervise the process of your build-out: selecting and managing the architects, contractor, and other vendors required to get your space completed.
- In situations where the landlord will perform the build-out, TARTAN will monitor the work and the construction schedule to ensure proper project completion.
The leasing process can have many twists and turns. TARTAN’s commitment is to guide you through this process as quickly and easily as it can be done–all the while providing frequent communication and support. Our goal is to find you the space that will allow your business to thrive and grow. Call us if you would like to talk about starting a search for new space for your business.
For More:
Selling Commercial Real Estate
Contact Us if You’re Interested in Leasing Space
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