Tenants and Landlords: Who is Responsible for What?

A commercial lease agreement not only cements your rights to a property but also outlines the division of responsibilities between tenants and landlords. During the negotiation process, your commercial real estate broker can help you delineate responsibilities, restrictions and tenant rights in order to secure a favorable lease. By clearly understanding your landlord’s responsibilities and your rights as a tenant, you can avoid costly and contentious legal battles in the future. To familiarize yourself with division of responsibilities, read through some common lease terms that are outlined below.

• Maintenance: The burden of maintenance responsibilities vary under differing circumstances. Generally, landlords are responsible for the cost of structural repairs while tenants are culpable for the wear and tear caused by factors like foot traffic. Your commercial broker or tenant representative can help to clearly define maintenance responsibilities in your lease agreement.
• Upgrades: Before signing a lease for a new property, consider your short and long-term goals in order to determine the office amenities and characteristics you’ll need. If you choose to upgrade a space, you will likely be responsible for the renovation or construction expenses. The cost of government-mandated upgrades, though, like those outlined in the Americans with Disabilities Act, usually fall to the landlord.
• Utilities: Because energy consumption and waste production is greater with businesses than with residents, utilities can be a major point of contention in many commercial leases. A commercial lease should clearly state who pays the utilities and include information about how each utility is metered. In order to ensure that the utility clause of your lease is fair, work with a commercial real estate broker with the experience and expertise to help you achieve fair outcomes.

For more information about commercial real estate, please contact Tom Pappas. As managing director at Studley, Inc., Tom specializes in strategic planning within the Denver market and develops real estate strategies to help his clients make sound commercial real estate decisions. Visit us online or call Tom today at (720) 259-1809.

Finding Room to Grow in Office Space: Resources for Further Reading

A mark of achievement and an opportunity for continued growth, moving into a new or larger office can give businesses the space and resources to increase productivity, facilitate client relationships and drive revenue. To find new office space that meets your needs and will optimize your future success, talk to your tenant representative  and read through the resources below.

• Before you begin negotiations, gain a better understanding of the terms, clauses, and potential pitfalls of your commercial lease agreement. With this explanation of commercial lease terminology and the expert guidance of your commercial real estate broker, you can more strategically negotiate for your ideal terms.
• For companies expanding quickly, sufficient square footage can become a rare resource. It may be time to move into a larger space if limited square footage is impeding employee and operational productivity. While square footage standards vary across industries, this article can help you begin determining the amount of space you need in your new office.
• If you are searching for new office space, the design of the space can be as important as its location and amenities. This New York Times article explores how office design has evolved with an enhanced value on open spaces and collaborative environments.

For more information about commercial real estate, please contact Tom Pappas. As managing director at Studley, Inc., Tom specializes in strategic planning within the Denver market and develops real estate strategies to help his clients make sound commercial real estate decisions. Visit us online or call Tom today at (720) 259-1809.

Analyzing Commercial Property On-the-Go

Doing your research before you sign on the dotted line can help you make a sound and strategic commercial real estate decision. An experienced tenant representative can also assist you in analyzing the numbers, identifying key opportunities, and alerting you to potential drawbacks. With his or her expertise and the assistance of a smartphone app, you can undertake comprehensive research into potential properties while on-site and on-the-go.

When visiting sites and office spaces, take the information available on a desktop financial analysis program and bring it with you. The Commercial Real Estate Analysis Your Way app is a financial analysis app that allows prospective buyers or lessees to analyze the cash flow of commercial real estate investments and leases, along with discounted cash flow measures like the Internal Rate of Return (IRR) and Net Present Value (NPV). Your commercial real estate broker can help you run further numbers, enabling you to more accurately forecast revenues, expenses, financing, tax liabilities and more.

For more information about commercial real estate, please contact Tom Pappas. As managing director at Studley, Inc., Tom specializes in strategic planning within the Denver market and develops real estate strategies to help his clients make sound commercial real estate decisions. Visit us online or call Tom today at (720) 259-1809.