Congratulations! Your small business has become successful enough to require a commercial space. If you’ve been using a home office or shared space, this prospect may be equal parts exciting and daunting. Purchasing real estate probably isn’t on your radar at the moment, but leasing commercial real estate is a sensible solution for most businesses looking to take things to the next level. The expert team here at Jones Aur is on a mission to match visionary tenants and landlords with exceptional locations and high-traffic real estate. Let’s take a look at what you need to know about leasing a commercial property in Memphis!
How do commercial real estate leases work?
A commercial real estate lease is a contract between a business and a landlord that stipulates the terms and conditions of commercial property rental. There are typically three types of commercial leases.
Full-service lease: This type of lease includes maintenance, property taxes, and janitorial services in the building.
Modified gross lease: With this type of lease, the tenant is financially responsible for things like property taxes and insurance as a monthly lump sum.
Net lease: This type of lease requires a lower lease payment, but all other costs are the tenant’s responsibility.
As you can see, the total cost to you will vary depending on the type of lease you agree to. Certain expenses, like property taxes, insurance, and maintenance, can be included in the rental agreement itself or may be the tenant’s sole responsibility. The lease term will generally be at the discretion of the property owner. Some common terms are 2-year, 5-year, and 10-year, but property owners may also offer longer-term arrangements.
What should you look for when leasing a commercial property?
Research is key when leasing a commercial property for your business. There are many factors to take into consideration, from the owner and landlord to the zoning laws and more! You should of course look for properties that fit your operating and budgetary needs, but pay attention to the dimensions and rates you’re being charged. Know in advance how much you have to pay, what exactly you will be responsible for covering, and how much your rent will increase each year. You’ll also want to establish details on how your lease will be transferred if your business closes or you decide to move to another property.
What are the steps involved in leasing a commercial property?
While the steps involved in leasing commercial real estate may vary depending on a variety of factors, there are some general guidelines for how the process works and what you can expect from it as a business owner. We’ll outline these for you below.
Set your budget
This is an obvious step, but once you know how much space you need, you’ll want to determine how much you can afford to pay each month. If you’re counting on a bank to finance your lease, connect with your business banker to find out the loan amount you can be approved for. Remember that the cost of leasing may not include other expenses, such as electricity, water, internet access, etc. These details should also be included in the terms of your lease.
Speak to a qualified expert
While you don’t have to work with a commercial real estate brokerage like Jones Aur in your search for the perfect property, we certainly recommend it! Our experienced team of associates will be able to help you figure out exactly what you need and match you with the right real estate. You can count on us to look out for your best interests when you’re negotiating with commercial property owners, too. We’ll walk you through every step of the leasing process!
Look at multiple options
Keep an open mind when you begin your search for a commercial property. The perfect place may not present itself right away! Some places may only need a coat of paint and some new furnishings to bring your vision to life, and an unfinished space can be customized to suit the look and feel of your business. This step is particularly important if you’re seeking out a property for retail purposes.
Enter into a lease agreement
The lease agreement is the final step in the commercial leasing process. If a commercial property owner has a building or space available for leasing, they will likely already have a lease agreement drawn up for you to sign. Before putting your signature on it, be sure to have it reviewed by your attorney!
The terms included in the lease agreement will generally cover:
- the rate you’ll pay for leasing the property
- the duration of the lease
- any restrictions or limitations imposed on your use of the property
- clauses that allow one or both parties to terminate the lease if necessary
Commercial property leases are binding legal contracts that can seriously impact your business. For this reason, we recommend engaging with a commercial real estate associate before you sign. Our team will ensure that the chosen property meets your specific needs and will keep your best interests in mind when negotiating with commercial property owners. Remember that you can request changes to any terms that you don’t find reasonable. Once you and the property owner agree on all terms, you’ll be ready to sign the lease and take the next step with your business!
Check every box with help from Jones Aur
Jones Aur is all about putting the right people in the right place. Our service is tailored to your needs, and we’re committed to helping your business grow. That begins with finding the best commercial property for you! If you’re looking for a new space, we’d love to be a part of your search. Reach out today to learn more about the services we offer business owners in Memphis!