15 Questions to Ask Before Leasing a Commercial Space
Whether you’re starting up or expanding your business, there are questions you should ask yourself before you go out and deal with brokers and lessors. Be certain that you already know what you want and what you need once you are out there. The real estate business is a big industry and there are a lot of options in your hands so you have to narrow them down to make it easier for you to find the perfect spot for your business.
Here are 15 questions you need to ask yourself and the lease giver before finalizing your contract:
What type of commercial lease do I need?
There are several types of commercial spaces that will cater to your business needs. You just have to figure out which one will suit you best. You can choose from high-rise and low-rise commercial office buildings, business parks, industrial parks, to commercial retail property like malls and other store-front types.
Where is the perfect location for my business to flourish?
Strategize your business properly and identify which areas have the most potential clients. The areas will always differ depending on the service of product you are offering.
How much can I afford?
Your budget will be one of the questions that brokers or lessors are going to ask you. This is the starting point of the biddings and offers.
How long do I plan to lease it out?
Aside from your budget, you must also be specific with the lease period because this will be part of your contract. Also, do not forget to be familiar with what happens when you need to leave before the end of the contract.
What is the handover condition of the offered property?
This is related to knowing what type of commercial space you want and need for your business. Several conditions are available to cater to your specific needs such as warm shell, bare, fitted out, or finished.
Can I refurbish the interior?
In relation to the handover condition of an offered space, you would also need to know if you will be allowed to make changes and how far you will be allowed to alter.
Are the terms of lease negotiable?
For any business deal you may have, there are terms that are negotiable and non-negotiable. Do not miss out on being well-informed about this opportunity to get the best out of a deal.
Are there additional costs on top of the rental fee?
Because you are going to spend your hard earned money, you need to understand where it is going and if there are other fees that were not mentioned when the space was offered to you. You need to make sure that you will be able to track all your outgoing supply.
Is the building PEZA accredited?
When a building is registered with PEZA (Philippine Economic Zone Authority), there are incentives that can benefit the tenants of the building. This accreditation can also help you with your expenses depending on the type of business you have.
What will it cost me in the future?
Make it a point to discuss the annual increase of the cost. What is the maximum increase per year and what will it cost you if ever there is any movement in the rate.
What does the total cost cover?
Aside from the rental of the space, it is important to know what is included in the asking price. Usually there are rates that include the association dues and taxes but some are separately computed.
Are there competitors near the offered space?
The success of your business will also depend on your nearby competitors. Survey the area for possible contenders or you can ask the landlord to include an exclusivity clause in the contract which states that he/she agrees not to place a competing business within certain distances from you.
What insurance coverage does the lease require?
Is it compulsory prior to moving in? Do your research about the different types of insurance and how much they cost so that you will know what to talk about during negotiations.
What is permitted?
Check with the building administration if there are regulations and laws that are being followed when it comes to property use and operations. This will save you from any charges in the future.
Can I sublease the space?
Besides knowing what is permitted in the building and the commercial space, clarify if you can sublease in the future if in case you pre-terminate the contract or if the space is too much for your company.
If these concerns have already been settled, then it’s time to look for the perfect commercial space. Did we miss out on anything? Feel free to share it with us here!