Commercial Real Estate Lease – Questions to ask before signing the document

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Renting commercial real estate is a huge responsibility and it certainly needs a lot of thinking on your part. The rules of commercial real estate lease are tight and it addresses each and every aspect of the lease. If you've ever rented commercial space, you know that finding a property and negotiating lease terms is serious business.

There are a few things you need to know if you haven't rented commercial space. The most important thing about commercial real estate lease is that there is no standard lease agreement; each leas is different so it needs to be carefully reviewed before ever grabbing the pen and signing the document. A commercial real estate lease is a legal binding contract; not something you can break or change at will. You need to ask yourself and the landlord a few crucial questions before you consider leasing a commercial real estate.

Ask yourself:
How long shall I Stay? You need to project how long your business can operate effectively in the space you plan to lease. Although all lease terms are negotiable, most short-term leases are for three to five years, and long-term leases are for 10 years.

Can I get out of the lease? Breaking a lease can result in serious penalties: You could lose your security deposit, be denied access to the space, and even be sued. Make sure you're committed to the length of the lease and the location before you sign.

Ask your broker:
What kind of experience do you have? Commercial real estate lease is a specialized industry. Most brokers concentrate on one or two property types, such as offices or warehouses. Select a broker who has a proven track record in the type of space you need.

Are my space needs too big or too small for you? Work with a broker who fits the right profile in terms of your space needs. A broker who works on large-scale spaces may not work as hard for a client seeking only 1,200 square feet of space.

Do you have any certifications? Experience is the best way to judge the caliber of a broker; however, designations from recognized real estate associations show that a broker has gone the extra mile.

Ask the landlord:
What is the tenant mix in your building? Opposites don't always attract when it comes to business. Be cautious about leasing space in a building where the majority of the tenant's corporate cultures are radically different from your company's.

Will there be onsite management? A manager probably won't be present at a small building. If a manager or custodian is not on the premises during regular business hours, get assurance that someone will be on call to respond to maintenance emergencies.

What kind of build-outs or amenities will you provide? Landlords frequently remodel spaces, provide moving allowances, or offer additional covered parking spaces as an incentive to a new tenant.

What are the terms of the lease? The monthly rent is, of course, a paramount issue. But a prospective tenant also needs to know if the lease includes a rent-escalation clause, which lets the landlord increase rent in the future. Also find out if you're required to pay charges for maintenance, taxes or other costs - often called a "triple net" or "net-net-net" lease.

Is there an option to sublease? With this option, if you don't need all the space you've rented, you can sublease some of it to another company. The ability to rent out part or all of your space can be vital if your business grows or if you need to relocate.

Muhammad Siddique is Real Estate Investor for  years mostly in commercial real estate specially shopping centers, hotels, motels and recommends TRCBVideos.com to convert aticles into Videos automgaically.

 

You should follow me on twitter here or  go http://twitter.com/siddiquem

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