Sourcing the Perfect Premises
Rent is typically the second largest expense for a company. Once you've found the site that meets your requirements, a landlord will seek to secure you to a lease for as long as possible.
How to source the perfect premises
Make certain that you answer:
- Have you allowed sufficient time to find your right solution?
- Have you really determined the following - your location, size, budget and quality of space?
- If your company is growing - will you still fit the space in two year's time?
These things take time - the wrong decision can have a dramatic effect on your bottom line.
Whether this is your first step into the world of leasing commercial premises or you’re an old hand, you will be driven by the needs of your business operation. Whether your imperatives are location, zoning, access to transport services, stud height, warehouse size or truck turning space we will work with you to match your needs as closely as possible. And when we’ve located the right premises, we will help structure successful leasing arrangements that work for both you and the landlord, because we understand that the nature of the relationship established at the outset will form a vital part of your business relationship going forward. We work hard to set you up for success.
A looming lease expiry is a real opportunity for many commercial tenants to lift the bar in terms of the company’s output and profitability. Make sure you set aside enough time to properly research the market so that you are in a good position to assess leasing opportunities and make proper comparisons between your current situation and new options. Ideally you will need six to nine months to source premises if you are looking for an existing property, but a purpose built solution will need a lead time of at least 18 months.
Make sure you have it all mapped out: The Business Plan
Ideally prospective commercial tenants should have a robust business plan with a five to 10 year horizon. This will enable Barfoot & Thompson to get a clear picture of your actual and ongoing requirements and cost parameters. Our experienced leasing agents are able to guide you about the amount of space you will require and any additional space requirements you may have as your company expands or contracts. When making decisions about your next move you will also need to consider the quality level you require and whether there are different quality requirements for different areas of the business.
Once your requirements as a tenant are clear, suitable potential premises will be identified by Barfoot & Thompson’s leasing agents and the landlords notified about your brief. Landlords will then prepare a submission taking into account your key requirements.
Detail in the fine print
Once you have identified suitable premises, the next important step is to get a good understanding of the leasing documentation. Standard commercial leasing documents contain a range of provisions which can raise different issues for landlords and tenants – it’s vital to have a good understanding of these so that you can tailor the agreement to suit your individual needs. Examples of these provisions include:
- Ratchet clauses (soft or hard)
- Make-good provisions
- Rent review controls
- Expansion and contraction provisions
Your Barfoot & Thompson leasing agent can help interpret the fine print and work with you to negotiate an effective lease that delivers the best result for both parties.
The legal process
- Is it a lease - sublease - assignment - the agreement to lease?
- What is the right form of documentation for your agreement?
- What is the difference?
We can assist in answering these and other key questions and setting up the most mutually beneficial type of agreement for both you and your landlord.
Committing to lease commercial premises is a major decision for tenants – your decision gives you the opportunity to control a significant business cost – accommodation – for a number of years. It’s also a decision that provides important medium term security for both your business and your staff. Make sure you invest in this task the time required to ensure a good result.
Click here to contact our leasing team.