How to Lease a Business Property
According to the U.S. Small Business Administration, approximately 29.6 million businesses existed in the U.S. in 2008. The quality of your business location is an important factor in determining whether it succeeds or fails. The area you choose for your business should be convenient for customers and in a locale where the demographics match the products and services you provide. Generally, a lease provides the flexibility of negotiating certain contractual terms such as the length of the occupancy and rental fees.
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Instructions
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Decide what type of property you want to lease. Common commercial properties include retail, industrial, multiuse, and office. Retail property is for business owners who sell products to consumers. Businesses that lease industrial space generally manufacture products such as coal, gas, and food and beverage goods. Multiuse space includes a mixture of commercial and residential tenants. Tenants in the service business may use office space, such as consultants and lawyers who sometimes may only need a small space. According to OfficeSpace.com, a small office space is approximately 3,000 square feet or less. Think about your type of business and what space you require to operate.
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Choose the type of property lease that works best for your business. There are four common commercial leases—gross, net, triple-net, shopping center, and a land or ground lease. A gross lease allows you to pay the property owner a base lease fee and also a percentage of your sale proceeds. With a net lease, you agree to pay your rent in addition to other expenses associated with the property such as insurance and maintenance fees. If you have a triple-net lease, then you would generally pay for all expenses for the property including rent, taxes, insurance, and maintenance. With a shopping center lease, in addition to your base rent you pay a percentage of your profits and other costs such as taxes. A shopping lease agreement can also include restrictions on hours of operations and signage rules. A land or ground lease gives you a right to build or improve a piece of land for business purposes. Evaluate the type of arrangement you desire with the owner of the property you lease.
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Hire a commercial real estate agent. A commercial real estate agent lists and locates business space for tenants. This professional will have access to the commercial multiple listing system (an online real estate database for license real estate professionals) to locate business property for you to lease and he will help you complete the necessary paperwork to finalize lease agreements.
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Contact the property management company or owner of the business property you want to lease. Speak with the property owner to get an understanding of the terms of the contract and to negotiate contractual terms. Your commercial real estate agent will facilitate the negotiation process, however, you should communicate with the owner to ensure you enter into a professional relationship that makes you comfortable.
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Sign the lease. Typically a business lease is for a minimum of three years. Once you sign your lease, you can occupy and begin your business operations.
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