If you are a business owner, it is likely that you will at some point become a tenant. Tenants take office for rent from a landlord in order to conduct their day-today business activities. A tenant may be a two-man accounting team that leases five hundred square feet in a small office building. Another is an international shipping company leasing five hundred thousand square feet of bulk space. The business activities of tenants vary, but the process of finding and keeping space is similar.
Advantages of Taking an Office for rent
The idea of ownership is ingrained in the subconscious of many business owners. There are, however, advantages to leasing. Sometimes these advantages outweigh those of ownership. Great reasons of Clifton Park office leasing include:
- Avoid Obsolescence: By taking an office for rent, you have the ability to move to a new, upgraded property upon termination of your current lease. Every couple of years, you can move to the newest facility and reap the benefits of its improvements.
- Cost Stability: Leases are typically structured with gradual increases or a flat rate that provides a solid picture for financial analysis. This stability allows you to correctly anticipate future costs. As a tenant, you won’t have to worry about setting up a capital reserve in case the roof collapses.
- Flexibility: Taking an office for rent may be a better option for your business, as it frees up capital to use in upgrading equipment, hiring employees, etc.
- Location: You may not be able to afford a building downtown, but you can lease space in that same high-demand location.
- Tax Deductions: Lease payments are tax deductible, as are operating expenses. Talk to your accountant about the tax benefits of leasing space to include depreciating improvements.
Finding a Broker
Many prospective tenants are hesitant to hire a broker to aid in their search for space. Some think that it’s too expensive; others hate the thought of narrowing their choices. Commercial real estate brokers make a living by serving you, the client. Here are some reasons you might want to consider having a broker on your side:
- Counsel: Think of your broker as your own private counselor. Just as you have confidentiality when speaking with your doctor or attorney, your broker will not release information to any outside parties unless you give the go-ahead. That being said, you should expect your broker to be honest with you, and you with her. You and your counselor may be spending countless hours on the phone, driving to see properties, or constructing offers over cold coffee.
- Market Knowledge: A good broker knows his market. He can tell you what’s available and what the going rates are. Your broker will also know about properties that are not yet on the market.
- Resources: The commercial real estate world is more specialized than residential arena and, as a result, is sometimes harder to deal with. There is no central Multiple Listing Service (MLS) in the commercial real estate industry. Each commercial firm uses different systems to find properties, and every broker has a different system. A good broker should have a developed system for gathering the intelligence you need for finding spaces. Some of those resources may be ones you do not have access to.
- Saving You Money: A good broker knows prevailing market rates and might be able to negotiate a better deal for you. I’ve seen too many small (and even a couple large) businesses, new to the leasing process, who thought they could do everything themselves. They find a location they like, get in contact with the listing agent, and give the landlord everything he wants. A broker will raise a red flag if anything pops up which is out of the ordinary (such as a hyper-inflated rate, exorbitant common-area maintenance fees, or lease clauses which may negatively affect your business).
- They’re Free: Can you believe that in most instances, you get the service of true commercial real estate professionals for free? In the majority of leasing situations, the landlord pays your broker (also called the tenant representative, or tenant rep.) a leasing commission.
- Time: A broker saves you time and effort. Let her do the search and find an office for rent. She should set up showings and remain in contact with the listing broker. A broker will also do the majority of lease negotiating for you. All you need to do is bring up any questions you have, walk through the potential space, and make final approvals.