One of the steps when purchasing a commercial property is learning to negotiate a commercial property lease. Your goal is to bring in tenants to cover the mortgage and make a profit. Unlike homeowners renting a property, your tenants will have needs and wants that will greatly impact their business. Ullian Realty has helped walk clients through the process of negotiating commercial property leases in Brevard County, FL for years. We’ve compiled four questions to ask before signing a tenant.
Retail spaces maintain a certain look and feel and need certain things in place to attract customers. Does your space offer what your potential tenant needs? If a manufacturing company plans to rent the space, then the electrical components may need to be upgraded.
The negotiating process should consider what the potential tenant wants and needs for their business to run successfully, as well as what terms you are comfortable in agreeing to. Who is covering the cost of the tenant requests updating the space with fresh paint? If it’s an office space above a restaurant, who will cover the cost to reinforce the flooring to prevent noise issues? Be realistic and don’t agree to upgrades or costs that could eat into your profit.
Although signing on a tenant for five to ten years can offer security, it also comes with risks. It’s easy to assume a business will take care of their space, however, this is not a guarantee. How long do you plan on holding onto the property? On the other hand, keep in mind that a tenant willing to commit to a longer commercial lease can offset other costs.
If you recently purchased the commercial space, you should expect some surprises will pop up within your first year. Make a list of the known maintenance issues and upgrades needed, then assume there will be some additional unforeseen changes made.
When the time comes to negotiate your next commercial property lease contact Ullian Realty in Brevard County, FL to walk you through the process. Our team has over 50 years of combined experience with commercial property deals and we will help make sure you ask the right questions before signing tenants.
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