Commercial Real Estate: The Wonders of Getting the Ideal Space
Typically, companies start looking for new commercial real estate space as little as nine months before their existing lease ends. But, unfortunately, they're doing it wrong. To successfully find and negotiate space, the savviest tenants can spend two to three years planning for a move. Here are some steps that can help you in getting the ideal space for your commercial real estate:
Step 1: Determining Your Space's Suitability
The first step in looking for a new space is to step back and look at your existing space. Sometimes, there's nothing wrong with your current commercial real estate that a few nips and tucks won't fix. However, if your existing space works and your rent is at the market, staying is usually cheaper and more accessible for your business to avoid the interruptions caused by moving.
Step 2: Finding a Commercial Real Estate Broker
If you decide that it makes sense to look at a new space, the first step is to find someone to help you with the process. A professional tenant rep can save you time by helping with every step in the process while also delivering better results due to his high level of expertise and access to unique tools. Usually, your first step is to go back to the broker that brought you to your current space. However, the market is constantly in flux, and it's also a good idea to reach out to other active brokers in your area. Talk to similar companies to see who they have used in the past, as well.
Step 3: Researching Markets and Submarkets
The site selection process can be the most time-consuming step in finding a new piece of commercial real estate to occupy unless you are sure that you want to stay in the same general area. Barring that, you will want to study demographics and economics, conduct site visits, and find the perfect place for your business. Even with a commercial real estate broker's help, this process can easily take six months, especially when you factor in travel.
Step 4: Discussing with Your Existing Landlord
Once you generally know what you want, it's time to sit down with your landlord. You will probably still have 18 or so months left on your lease at this point, but it's still a great time to have a discussion. One possibility is that your landlord might be willing to sweeten the pot to keep you. Another is that they might want to get you out sooner to accommodate another tenant. In a worst-case scenario, you waste an hour, but you still retain all of the rights you have under your lease.
Step 5: Touring Spaces
Once you know that you're moving, it's time to start seriously looking at spaces. Your commercial real estate broker can help facilitate this entire process by finding potential sites and by arranging your tour. This process can usually take a few months.
Step 6: Negotiating and Signing
Once you've found the perfect space and a couple of backups, it's time to start the negotiation process. The process' speed varies based on your market, but it's best to earmark a couple of months so that you aren't rushed into taking an unsuitable offer.
Step 7: Building the New Space Out
Finally, you have to wait for your space to be built out and installed in all its systems. Even simple build-outs can take 60 or more days.
Optional Step: When Bad Things Happen to Good Commercial Real Estate
To be safe, wise tenants build a few extra months into their schedule. That way, if something goes wrong, they still have some spare time.
If you have any questions on this article or need commercial space, contact us anytime, we're happy to help. Contact us at (480) 330-8897 or send us an email at firstname.lastname@example.org.
Need help on how to get started investing in commercial real estate? We got you covered! We prepared a free e-book that will serve as your guide to achieve your long-term business goals or obtain that property you’ve always been dreaming of!
Phill Tomlinson is a commercial real estate broker with Commercial Properties, Inc. (CPI) in Scottsdale, Arizona, and owner of the Leveraged CRE Investment Team specializing in investment sales and tenant/landlord representation in the Phoenix and Scottsdale submarkets. Phill applies over 21 years of experience in the Real Estate industry helping investors and owners maximize their returns.
Bookmark www.leveragedcre.com to learn more about the Commercial Real Estate market and keep informed of relevant real estate strategies designed to maximize your income property investment results. Connect and follow Phill on Social Media at sm.leveragedcre.com/smplatform. #LeveragedCRE