Commercial Lease Advice

Commercial Lease For An Office

When thinking about getting a commercial lease for an office, there are some key things to consider before signing on the dotted line.
Commercial leases are a long term arrangement and it is expensive to have to relocate if the building or space is not what you were expecting.
Doing your homework before you take on a lease will save you a lot of frustration and money!

Always seek advice from a Commercial Lawyer

These are some questions to answer to see if you still like the office space or building:

How many floors does the building have?
Is it a low, medium or high rise building?
High-rise buildings tend to be more prestigious and may offer exceptional views but are, of course, more expensive.
Is the property on a block surrounded by other buildings, or is it on a corner?
Corner locations are preferable as they often offer additional views and more natural light.
Is access to the building and parking easy?
Does the traffic flow facilitate accessibility?
Is the building visible from the street, and does it have a presence?
Are the surrounding uses compatible with the building?
It is often advantageous to be located in an office area surrounded by buildings with similar benefits.
Is the building look appealing?
Is it nicely landscaped and well maintained?
The first impression counts!
What kind of parking spaces are there?
Are they secure and underground?
Are they free of charge?
What is the monthly rate?
Are they tandem parking spaces, i.e. parking spaces behind each other that make life difficult when an employee has to leave the building?
Are the parking spaces covered and underground?
What kind of exterior facade does the building have?
Is it stately with a timeless look or modern with glass and concrete
Will it still look good in 10 years time?
The premises should still look good in 10 years when the leases expire and will you renew your lease?
Is the foyer modern or outdated?
Are the bathrooms and tea rooms modern?
What is the ratio of lifts to floor space?
It is often recommended to have one lift per 3000 sq ft.
The speed of the lifts is also critical as people do not like to be kept waiting.
What other amenities does the building offer?
Larger buildings usually have a gym, restaurant, cafes, shared conference rooms or small retail shops.
Smaller office buildings will not have extra amenities but look for them in the surrounding buildings.
Is the building wheelchair and mobility friendly for staff and visitors?
If the building is currently rented, check what type of tenants have rented the building, are they focused on a particular industry?

More To Consider When Taking On A Commercial Lease

When analysing a potential commercial property, check whether the heating and air conditioning systems are designed for the tenants’ capacity in the building.

Check the data cabling capabilities and ensure the building can offer high speed and secure wifi.

If it is a larger property and has other tenants, go and have a chat to them about any insights into the problems of the building and the surrounding area.

Some simple questions you can ask office building tenants are:

Why did you move into this building in particular?
What other buildings have you looked at?
Has this building met your expectations?
What issues are there with this building?
Are the building’s managers approachable?
Do you intend to renew your lease when it expires? If so, why or why not?

Commercial lease terms for retail properties are different.

Thinking about signing a retail lease?
Retail leases can have some different clauses that you should know about!
Always have a commercial lawyer look at your lease agreement.
The old adage about “what is not in the lease is usually more important than what is in the lease”
Having a commercial lawyer look at your lease contract will quickly highlight the areas that may be of concern!
If you do not have the key points that relates to you and your business and they are not in the lease agreement – Then you do not have any way to dispute something or even terminate your lease if needed/

There are usually four ways to sign a retail lease:

Please fixed rent for a period of, for example, three years.

A fixed rent with CPI increases adjusted annually for a period of, say, 3 to 5 years and with a review of the rent to the market rent at a specified interval during the lease or at the expiry of the lease if an option is taken up.
This is the most common form of the lease as it seems fair to both parties.
Moreover, it gives the retailer security and the owner reasonable security of tenure.

A fixed minimum rent plus a percentage of the turnover the retailer makes. This is a typical leasing arrangement for supermarkets.

A direct percentage of turnover.

The latter two arrangements are standard in food retailing, especially for supermarkets, and the large shopping complexes like to structure their leases in this way.

However, they have some obvious disadvantages.

The more complex the retailer works, the more they have to pay. It is also challenging to set a percentage, and you need to know the retailer’s business well.

Always seek advice before you enter any commercial lease!