Commercial Property Rentals
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Assessing the true cost of commercial property rentals can be surprisingly difficult. Rent is often calculated in a complex way and is often based on external measures which can be difficult to fully understand. In addition to rent, most commercial renters end up paying for other things as well, so even if you can accurately calculate your rent, there might be other expenses to consider.
Comparing different commercial spaces is just as difficult as assessing the cost of a single property rental, where one building may calculate rent in one way, while another building lists its square footage in a different way than the first, making comparisons very difficult. Here are some steps to assess the true cost of commercial property rentals:
- Square Footage: It's tempting to think that square footage is square footage, but unfortunately that's not the case. Some landlords calculate their space from the outer wall, some from the middle of the wall, and some from the inside of the wall. It may not seem like much, but when multiplied over thousands of square feet, it really adds up. Make sure you confirm how the square footage that the landlord lists is calculated, otherwise you might end up paying for a lot of unused space behind a wall.
- Common Spaces: Larger buildings almost always have shared spaces, lobbies, hallways, parking lots, bathrooms, etc. Determine whether or not the landlord is charging you for use of this space when comparing properties, whether it's part of rent, or whether it's a separate fee.
- Layout: Even when you figure out how square footage is calculated, don't just look at the numbers. How an area is laid out makes a tremendous difference. If a rental has more square footage, but is organized like a maze, it may not be nearly useful as a flat space with unobstructed open areas. Awkward angles and walls can really impair how furniture, office equipment and dividers can be placed and can have a huge impact on usefulness.
- Extra Fees: When you pay rent in a residential building, it often includes all sorts of amenities (such as access to a common room, pool, laundry facilities, etc). Commercial buildings on the other hand, tend to charge you for everything, so don't assume that you have access to areas of the building simply because you're paying rent. Find out exactly what you will have access to and how it will cost per month to gain access to essential areas.
- Profits: Some commercial buildings, such as shopping areas, malls, etc, often require that retail tenants pay a portion of their profits in addition to monthly rent. Determine whether the commercial space you are interested in requires this, which is sometimes known as a "percentage rent".
Hiring a Legal Expert to Help with your Commercial Property Rental
As a budding small business owner, you already have enough on your plate from drafting the business plan to finding quality employees. Let a skilled business and commercial law attorney help you get through the commercial property rental process. A local attorney will be able ease your burden by reviewing important lease terms, assisting in the negotiation process, and more.