Most business owners are not familiar with the ways of office lease renewal. What is even more unfortunate is that they do not even realise that there are plenty of ways to get the most out of the renewal. Not knowing the terms of the negotiation, may leave the tenants with a deep sense of loss.
However, approaching commercial lease renewal may result in a better agreement with familiar terms. Rent is one of the biggest expenses for every business. So, if you have your commercial space for lease Kelowna coming up for renewal, you need to keep your company’s profitabilityin mind.
Here are ways to add value to the commercial lease renewal to get the most out of it.
Tips to add more value to your commercial lease renewal
- Evaluate your business’s needs
Do your research before starting the negotiations with the landlord for the renewal of the commercial lease Fraser Valley &Kelowna. Are you aware of the future space requirements of your business? Do not feel clueless if the terms of the negotiation seem too harsh. Ask yourself whether moving to a new commercial space is a better idea. If the lease renewal has come up after a gap of two to three years, conduct a market survey to find out what works for you and what does not. The best you can do is reduce the term of the lease and walk away easily if you are not sure about your needs.
- Involve a legal representative
It is only likely that the landlord will have more experience in negotiating a deal. Contrary to that, your tenants may have been in the market for not more than a decade. Therefore, you need a legal representative who is aware of the present market conditions and weighsthem against the terms of lease renewal. The presence of a lawyer indicates that you are aware of the current market conditions and force the landlord to make the terms of the lease more competitive or risk losing the tenant.
But, don’t just engage any lawyer, make sure they have the skills of representing tenants. Emil Anderson Properties has been around for over thirty years and has extensive knowledge of commercial real estate, especially leases. You can also discuss your renewal procedure with them for a more favourable solution.
- Know the expenses you need to bear
Have you reviewed the terms of the commercial lease carefully? Be sure to check the in between lines so that you know whether the total incremented cost exceeds your budget. Apart from this, the lease needs to carefully mention any future increase in the base rent. Do not hesitate to speak when you need when dealing with commercial space for lease Fraser Valley &Kelowna.
- Know the lease options
What makes the cost of a commercial lease vary? A lot depends on the type of lease you need to renew. Here is what you must not overlook.
- In a gross rent lease, you pay a consolidated amount to the landlord comprising the base rent and the rest of the incidentals. The incidentals include insurance, property taxes, maintenance, utilities, repairs, and common area expenses like landscaping, janitorial services, and other aspects of property management.
- In a modified gross lease, the landlord and the tenant of commercial premises share a combined incidental cost.
- You can also sign a net lease where you pay the incidentals directly, resulting in a lower rent amount.
- In the double net lease, you need to pay property taxes and insurance along with the rent amount and in the triple net lease, you will pay the utilities, property taxes, and insurance with the base rent.
- The landlords often mention separate provisions of rent and include in it the cost of maintaining the common area.
- Researching the property
When it comes to renewing the lease of office space for rent Kelowna & Fraser Valley, you need to research the property keeping in mind your future. For instance, you need to check whether there are other tenants on the same property and whether they are compatible with your business. Apart from this, you need to analyse the building traffic as a lot may have changed from thetime you rented the commercial premises to the present day. If other tenants are also using a major area of the parking lot, chances are that you would have more negotiation power for the common area payments.
You need to talk to other businesses in the neighbourhood to find out if there are issues that might affect your business negatively. If you own a retail business and the neighbourhood is declining, you will have better prospects for bargaining the terms of the lease.
- Lease Termination
It is necessary to check if either party may terminate the lease. Can you be kicked out of the commercial premises for missing the rent? Ask the landlord whether you can break the lease midway if you plan to a move to bigger space or if the business does not do well.
- Add more provisions
The lease agreement must be complete and satisfactory to both sides. So, one of the parties must leave anything for later. Remember that the lease agreement determines the success of your business; be sure to incorporate additional provisions like business hours, insurance, and other clauses that favour your company. Often, certain provisions in many commercial leases include renovation of the parking lot or the roof. You need to avoid all that to stay safe and secure financially.
Landlords usually submit the terms of the lease during renewal quickly. But you must never rush to sign the document. Read and review the document carefully to understand your responsibilities and add value to the terms of the commercial lease agreement.