Guide Lines when looking for a Commercial/Industrial Property. Understand the market conditions.
Congratulations, you have begun your journey at finding a new commercial property, you are 20% of the way to securing your new space.
As a commercial tenant, it can be tricky to find and secure your dream property. Yet with tenacity, a good credit and tenant record, and an understanding of what commercial property owners look for in tenants, you can find attractive, rewarding and great premises.
To stand the highest chance of success when you apply to lease commercial property, read these 5 things that commercial property owners and landlords wish prospective tenants would know:
1. Prime commercial property is in high demand
There are limited properties within central business districts. Demand often outstrips supply, as many businesses want a central, convenient location. As a result, property owners must process large volumes of applications. If you apply to rent a property at a peak time of year, which is between March and November, you can expect to face tough competition.
To beat other tenants and find a great location, plan your move accordingly. You could also find property further away and use flexi-time to avoid employees struggling with rush-hour commuting.
2. Processing commercial/industrial rental applications can take time
Property owners and landlords need to liaise with multiple tenants. It’s a good idea to be polite and considerate when querying agents. Applications, can take up to one week to process, and leases/sales can take another week for documents to be reviewed properly. If you show demanding behaviour before you’ve even sent your application documents, the commercial property’s owner will be less inclined to favour granting you the lease. If you are successful with your offer, you are approximately 50% of the process through.
3. Have reasonable expectations of your new premises
If you are moving into an older building, keep in mind that there are specific requirements according to property law that might not include all your personal requirements.
The law requires landlords to ensure that the property is fit for the use for which it is being let. This means a commercial property owner is required to ensure their building is safe and maintained via normal running repairs. However, landlords are not required to perform security upgrades or aesthetic changes (painting walls, replacing carpets, etc.) unless negotiated upfront and in the Offer document, which is either your offer to lease document when dealing with a rental property, or your Offer to Purchase/Sale Agreement when dealing with purchasing a property.
4. Cooperative tenants are always preferred
Most commercial property owners have experiences dealing with nightmare tenants who always pay late or complain. One of the first things the property owner will look for is signs of a good fit, so make sure that you keep interactions cordial and professional.
Because property owners must perform plenty of admin tasks already, they’ll be wary if it seems from the outset that your company’s tenancy will add excessively to existing administrative loads.
5. It’s easier when tenants know their needs
Many property owners experience the frustration of a tenant appearing happy with their commercial space at first but then finding it inadequate upon occupancy. Landlords and owners naturally want to avoid last-minute cancelations and having to scramble for new occupants. Make sure that you are fully aware of everything you need in your commercial space, before you even start looking in earnest, list your:
- Zoning needs
- Utility needs
- Current and future space needs
With proper planning, you can find a property that meets every non-negotiable requirement and save both your business and the property owner the hassle of having to start over with the leasing process.
Once the Offer Documents have been accepted, the turn around time for a lease agreement to be prepared and sent out for signature can take up to 2 weeks. Please note at this stage, your deposit is already due.
Once the lease is out and signed by both parties, your deposit and first months rentals have already been paid, you may receive the keys on the commencement date of your lease agreement. Always try to negotiate a beneficial occupation period at the start of your lease to give you time to furnish your new premises. Then you are 100% of the way with your rental transaction.
When dealing with a sales transaction, even when your sale is accepted, you are only about 40% of the way through the transaction. There are still a number of elements that still need to be processed, such as:
- Your Due Diligence Period
- Any suspensive conditions that need to be met.
- Finance Approvals.
- Signing of Banks Finance Documents.
- Signing of the Transferring Attorneys Documents
- Lodging the Sale in the Deeds Office
Then you are 100% complete in the process.