Real estate is a great asset to any business. There are many avenues to purchase and own property, depending on your market and needs.
There are also lots of ways to lease property, including office space, storage, and residential housing. This can be expensive and time consuming to navigate both owner financing as well as a tenant financing.
Newly acquired properties can be difficult to navigate in order to get the best deal for the business. Fully qualified professionals can be hard to find or obtain rights wise.
This article will talk about some of the more important ways commercial real estate professionals can help their businesses grow and take advantage of new properties coming onto the market.
This article will talk about some of the more important ways commercial real estate professionals can help their businesses grow and take advantage of new properties coming onto the market.
Commercial real estate lease basics
A commercial real estate lease is a legal agreement between you and the owner or manager of a space that provides structure and guidance for the student, student tenant, business, or other entity who wishes to use a space in college or college-related settings.
The purpose of a commercial real estate lease is to provide an organized method for storage, office, and workplace uses to communicate their terms and conditions of use. This includes provisions such as rent payment dates and maximum occupancy.
Many times students seeking space usage in classrooms, lounges, conference rooms, etc. do not have the rights or agreements necessary to ensure their safety and privacy.
Commercial real estate lease considerations
Real estate professionals can make a nice salary doing lease negotiations, signing, and other aspects of the business. This field can be very competitive, which is why being prepared can pay off.
At their best, professionals will bring years of experience in different commercial districts and markets; at their worst, they’ll mix up N/A and zeroes into a two-digit number. We’re here to tell you not to look back- both you and your client need new skills!
This article will talk about some basic real estate leasing and negotiation tips that will help you become a pro at the hard job of all- being able to get clients (and them) to agree on an agreement.
Who is the tenant?
When a party interested in a piece of property enters into a leasing or negotiation process, they must know the tenant’s identity.
To be eligible for housing assistance, the person or entity seeking housing assistance must have a place to live. Therefore, in order to qualify for rental assistance, the person or entity must have an identified and confirmed residence to which they are entitled.
In order to qualify for office space, you must have an office that is easily accessible and that provides adequate space for your operations. In order to qualify as community space, you must have people that can use the area comfortably and with out having to ask for permission.
These elements of residency are important when trying to identify who the tenant is going to be and what kind of environment they will create in the space.
What use will the space have?
During the initial stages of a project, called pre-sublease, the landlord and real estate professionals work together to determine if the space will be useful to the community.
If so, then they can work with the property owner to create a usage plan that includes rules about who can use the space, when they can use it, and for how long it will be used.
This process takes time and effort, and sometimes it is not included in an affordable housing project. If this is your project, than you may need to negotiate your monthly rent with the landlord.
During pre-lease negotiations, both parties look for common ground and agree on a fair lease length before either party moves off the lease or breaks it. These negotiations are important so both parties are covered under the lease.
What are the financial requirements?
Leasing is a very popular way to manage property. There are many leasing companies, and each has their own set of requirements and guidelines for leases.
Some companies only offer leases to qualified applicants, while others prefer people who are knowledgeable about the property and its potential users. Knowledgeable individuals are able to negotiate better deals with the landlord as well as members of the public looking to purchase a property.
It is important to understand the financial obligations when signing a lease, especially if you are not familiar with the property or its potential users. The typical lease length is three years, so it is important to study how much money you will spend over that period.
The total cost of ownership includes payment obligations, legal fees, and any benefits that the community benefits program may provide.
Does the tenant have sufficient credit?
When a tenant and landlord do a credit check, they are looking at the tenant’s credit score to determine if it meets the requirements for a loan.
If the landlord finds a problem with the credit history of the tenant, it can put a lot of strain on the negotiation and signing of a lease. A bad credit history can hold back an offer of a lease because it does not feel comfortable providing enough money in rent to cover costs, especially if there is an up-front fee for obtaining a good credit history.
A good credit score can help your chances of getting signed up as an apartment provider, so don’t be too strict with your requirements. If you have to take into account recent financial transactions and activity, then you should also consider how well you fit the profile of the person who will live in your unit.
What are the timing requirements?
When it comes to leasing office space, the timing of your inquiries and negotiations is critical. Most leases have a set date of opening, this is referred to as the initial lease date.
Once this date has passed, new occupants must re-negotiate the terms of the space to update or reorganize their operations. This process can take several months or even years, so be prepared for patience!
During this patience period, new occupants have to figure out if they want to be a part of the community and participate in operations, whether they are willing to pay for what they get, and whether they have the resources to operate with that space.
Are there any alterations required by the landlord?
While most landlords are happy to let their units go as-is for a few months, there are times when you need to touch base with them.
Some of these updates include providing copies of bills and invoice numbers when offering a new unit, offering to move in before the new year is over (January 1–2), and making changes to decor or features in the unit during the preview period.
Of course, these changes do not apply to emergency situations such as a broken furnace or heat source, so if those are gone, then nothing needs to be changed.
Other updates that can happen include installing A/C or cooling systems, moving antennas or antennas lines, adding controls or switches for things like fans and LCD displays on controls, and adding thermal insulation where needed.
