Mistakes To Avoid When Leasing Office Spaceby: Confilabs
Mistakes that are made when leasing office space are most likely to occur when commercial real estate brokers aren’t involved. A good commercial real estate broker guides commercial landlords through the leasing process. Real estate impacts a company’s employee retention, productivity and workplace morale. If a commercial property isn’t the right fit for a business it affects everyone involved from the landlord to the business owner, employees and customers. Here are a few mistakes that occur when leasing office space and how to avoid them.
Commercial landlords not only need to understand the market, they need to have an advocate working on their behalf to maximize profits and help the landlord to meet his or her goals. Successful commercial real estate brokers provide their clients with valuable insight into the demographics, market and trends as well as skill at negotiation. Good commercial real estate brokers are only focused on commercial real estate. Some residential brokers try to dabble in commercial real estate and get in over their heads, lacking the experience and expertise needed. Successful real estate investors know the benefit of working with commercial real estate brokers.
A good commercial real estate broker matches your commercial space with clients who have a definite need rather than with a tenant who waited too long to start the process of moving their business. Most of us have heard the saying, “good things come to those who wait,” and when it comes to tenants who rush the process the saying still rings true. These are tenants who don’t renew a lease several years later because the space didn’t quite meet their needs to begin with. The tenant may have leased the wrong amount of space or not measured the space at all. Such a situation is a waste of money and time for the landlord.
It’s difficult to align a real estate plan with a corporate business plan. Fortunately, commercial real estate brokers are in the business of doing so. Without them many landlords and business owners don’t always communicate their long term future goals or dealing with the “unknowns” when it comes to negotiating the lease. When a business succeeds or fails, so does the landlord and having a commercial real estate broker there to negotiate expansion and contraction rights is essential. Commercial real estate brokers help you to avoid the mistake of not planning for the future.
Companies often sign a short lease because they think they’re buying flexibility while others sign a long-term lease as a means of attaining maximum security. Many remember the nightmare that occurred in Silicon Valley where large swings in rent forced companies who signed long term leases into bankruptcy or severe financial harm. The key here is to strike a balance. Commercial real estate brokers pair landlords with companies who understand the long-term approach that’s required in real estate while also keeping short term trends and their business activities in focus.
The key to avoiding mistakes when leasing office space lies in working with a seasoned commercial real estate broker. When a tenant leases the wrong space everyone loses. Commercial real estate brokers help landlords and business owners to communicate their long-term goals for the future as a means of aligning real estate plans with corporate business plans.