Whether you are starting up a business or already established and seeking to relocate or expand. It is important to use a leasing agent no matter the size of your business. While there are additional fees, a good leasing agent will save you in the long term and you should contact your real estate expert.
If you are a business starting out or relocating it is important to seek advice from a tenant leasing agent, as remember a letting agent is acting on behalf of the landlord’s interests, not yours. Also, while you might think you have the business skills to negotiate a good rent unless you are doing so regularly, you will likely be on the wrong side of those negotiations without even knowing it. Rent is also only one element of a commercial lease. Many commercial leases can be 100 plus pages, and the lease terms could have far-reaching implications for your business if not correctly understood from the outset.
Just some of the Commercial lease terms to be mindful of include:
Service Charge, & apportionment
Dilapidation’s/ Yield Up Clauses
Assignment/Sub letting rights
Restrictive Use of the property
Rent Review Clauses
And there is a host of other clauses that may affect your business operations. A leasing expert will understand your business and know how lease clauses may affect your business in the future. Going it alone could cost your business considerably in the future.
Your solicitor will protect your interests from a legal point of view. However, they may not consider the commercial implications lease clauses may have on your operations.
Many times, I have seen tenants agreeing to rents with little negotiations and also pay no attention to other costs, such as service charge, insurance and local rate. Not to mention long-term costs like repair costs or major work required to a development. Many tenants believe they are getting a good deal and they may be getting the market rent and comparable rents per sqft. However, many tenants leave a lot of inducements on the table, from extended rent-free periods, break options and fit-out contributions. An experienced leasing agent would make sure to avail of whatever inducements were available.
It is not just financially where tenants lose out by not engaging a leasing agent. I have seen tenants suffer because they did not understand the service charge, repair clause, yield up clause or restrictions on trade or trading hours.
With many businesses now availing of flexi-time, offices stay open later. However, if the building or car park closes at normal closing times, a tenant may find themselves paying more to keep buildings open or in some cases not being able to provide staff with parking after a set time.
Many retailers believe they have exclusive rights to sell a product or provide a service within a scheme, only too late learn that they are actually restricted to only sell a certain product or provide a certain service, and the landlord can allow others to sell or provide that same product or service as they wish.
In summary, the level of rent is not the only thing that will affect your business; unknown lease clauses can have a greater impact on your business operations. A good leasing agent will get to understand your business and needs and negotiate the best lease possible and clearly explain the lease clauses to you. If your business is not property it is best to talk to experts.