Commercial Real Estate Sales & Leasing

It is mind boggling how often landlords and tenants find themselves looking for guidance because an unpleasant surprise has cropped up during the course of a lease.  In most every case, such surprises are the result of having signed a poorly understood or poorly constructed lease agreement. Essentially, a lease is much like a partnership agreement in that it sets out the parameters of a business relationship.  When everything goes as planned, most any lease will serve the parties well but the true test occurs when there are hiccups in the relationship.  If the lease has not been carefully drafted, a hiccup can become a major problem for one or the other of the parties. It is important to sit down and negotiate a good lease that will serve both parties well.

In that the average executive will only negotiate a handful of leases over the course of an entire career, competence is often difficult to achieve. While hindsight is always 20/20, the learning curve is just too steep. Learning by making mistakes can be extremely costly. As a result, a company’s representative (i.e. owner, office manager, etc.), will usually seek out advisors (i.e. real estate brokers, attorneys, etc.) to assist in the process. That is where KJM Capital Advisors comes in.

As previously states, a lease, at it’s core, is a business relationship – an agreement between a tenant and a landlord. Although leasing commercial real estate may appear simplistic, perhaps even one-dimensional, it is crucial to take 7 essential steps. Otherwise, the process can turn into disarray.

Though a lessee may have only a few decisive requests and/or expectations, a broad idea about one’s future real estate property is vital. A lessee should, before initiating a CRE search, determine his/her square footage requirements. Refer to How Space is Measured for further information on commercial property calculations. Once the “Define your Requirements” element has been satisfied, an additional architectural summary of requirements can be created.

Locating the perfect real estate to lease can be thorny. Luckily, commercial space listings can be found with our help. When beginning the search, keep in mind the utility of CRE broker, especially when dealing with a market assessment. A market assessment presents various space alternatives, comparing/contrasting a lessee’s options. Alongside evaluating specific properties, one should keep track of general market trends. Economic conditions can influence a lessee’s decisions to endow in a specific property. Once the essential information has been gathered, and appropriate space has been found, one is ready for a physical tour.

A property review and physical tour is the next step of commercial leasing. Since an expected lessee engages in numerous visits and tours, it would be beneficial to take notes on each property.

The proposal process consists of five elements: preparing a RFP (request for proposal), issuing the RFP to suitable properties, reviewing the landlords’ responses, evaluating offers, and perhaps preparing a Comparative Lease Analysis.

Space planning and architectural evaluation

Work with your contractors and development team to plan how the space will need to be built out to meet your business needs and obtain cost estimates.

Various types of leases exist. Prior to negotiating terms of a lease, outline thoroughly provisions that would promote your business. Before entering into a binding contract, decide the duration. A short term lease yields flexibility and more leeway to change your demands after a given period. Though long term leases are less supple, they provide stability. The negotiating process will take seemingly perpetual give-and-take, but settling for wary provisions is foolish.