Camille Paley, Vice President of Paley Commercial explains the 5 Steps When Searching for Commercial Space:
Step 2 – What Geographic Area best suits your needs? Do you require a densely populated location to pull from a more diverse labor pool? Is being close to public transportation a vital component? When considering location, one’s budget is a huge part of this equation. For instance, if the Warner Center is the ideal area, but the rental rates there are too high, you might want to consider a move to a Canoga Park instead. Also, if location is not vital to your search, consider gearing it towards a less desirable one where there are more vacancies which in turn results in cheaper lease rates and more Landlord flexibility in terms of free rent and build-out contribution.
Step 3 – Choose a Commercial Broker who is familiar with the area where you are looking to locate. They can assist you by supplying a comprehensive search of the current inventory that aligns with your needs. This will include building square footage, building specifications, lease rates, and other salient facts. In addition, a Commercial Broker that is knowledgeable with the aera will be able to provide you with Lease Comps of other similar transactions that have occurred. This type of information is crucial when narrowing down your search. After you and your Agent have come up with an inventory list of properties to view, he or she will schedule showings and facilitate tours of potential spaces. This provides you with the opportunity to see things in person and “kick the tires” so to speak. There is no substitute for this, and we highly suggest you re-visit any property in which you are thinking of making an offer in order to make certain you or your Commercial Agent haven’t overlooked anything. The very best part of this service to you as a Tenant is your Commercial Broker’s fee is at NO CHARGE TO YOU. Yes, that’s correct, as it is paid by the Landlord. For this reason alone, should encourage you to always enlist the assistance of a trained professional when performing your search for commercial space.
Step 4 – Find a Space You Like. Have your Commercial Broker write-up a Letter of Intent referred to as a “LOI” or Offer to Lease. This is a non-binding proposal outlining the basic parameters of your prospective lease terms for the subject space. This is where the negotiations truly begins as it relates to a variety of items that are to be contained in your lease such as price (of course), escalations, rental abatement, tenant improvement work, etc. It is standard to receive a Counter-Proposal to your initial proposal regarding the items which are acceptable to the Landlord and which items are not. This process can take a few steps or many more for complicated transactions. After completion of the negotiating process, your Commercial Broker will receive a “draft” lease agreement for you and your attorney’s comprehensive review to make certain all of the terms contained in the Letter of Intent and throughout the negotiation process are contained in the body of the lease. We recommend a Tenant who is not familiar with these type of contracts defer their questions to both their agent and attorney.
Step 5 – When the Lease Agreement is Approved, you would execute the contract. To complete this process, you will be required to provide the first month’s rent and security deposit, proof of liability insurance naming the Landlord as additional insured, after which you will be issued a set of keys and given possession of the premises. It is important to note that just because the lease has been consummated, your Broker’s job is not done. An experienced and reputable agent will be there to assist to throughout the remainder of the process in the event anything arises which more times than not does.
As you can surmise the leasing of a commercial space is not a simple process and takes the assistance of several professionals. By hiring the right Commercial Broker ensures that you are getting the best deal possible, while taking several important variables off your plate. This gives you the very best position in which to negotiate. , but now you have a point of reference moving forward. Click on this link for other valueable information.
In the event you are ready to begin your search for commercial space and want to realize the benefits of hiring the right Commercial Broker, or have any additional questions about Paley Commercial Real Estate, please reach out to me at our Woodland Hills office.