A Tenant’s Guide to Commercial Lease Terms

Signing a commercial lease agreement can be one of your more significant responsibilities if you are a business owner. A complex yet highly important document, your lease agreement dictates not only how you can use physical space but also how your company’s brand, culture and production can grow. By working with a commercial leasing agent, you can take steps to better understand and secure a beneficial a commercial lease.

• Premises: A commercial lease agreement must include the dimensions or square footage of the premise being leased. Because commercial square footage can be measured according to different methods, take care to understand the precise square footage included in your agreement.
• Term: Your lease term is the time period during which you will have exclusive possession of the property being leased. Your commercial real estate broker can help you negotiate a beneficial term that allows your business the flexibility to target both your short and long-term goals.
• Repairs and Maintenance: When reviewing your commercial lease, clarify responsibilities for repairs to and maintenance of the property. The landlord is generally responsible for most of the maintenance and repair obligations that arise during the lease term, but locate the stipulations within the agreement to confirm and to avoid unanticipated fines or fees.
• Recapture Provisions: The term “recapture” refers to the landlord’s right to prematurely terminate a tenant’s rights under the lease. To help you avoid this scenario, your commercial real estate broker can locate and negotiate for the removal of any recapture provisions.

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.

When is it Time to Move into a Larger Office?

As your business expands, so, too, may the needs and requirements of your current office space. If you have outgrown your office, consider finding a new office space instead of trying to rework the existing space to your needs. While there may be several reasons for moving into a larger office, here are a few signs that it may be time to trade up for more space.

• Expanding Business Needs: With continued success, you may need additional employees, new equipment, and increased resources to meet the growing demand for your product or service. All these things, though, require additional space. If space limitations are preventing you from expanding your business, talk to a commercial real estate broker about moving into a larger space.
• Limited Storage Space: As storage space is exhausted, it can become increasingly difficult to organize your office. A cluttered, disorganized workplace can not only detract from a professional appearance but also impact employee performance and efficiency. Look for a larger space that works with your current and future needs instead of restricting them.
• Confined Work Spaces: Your employees need sufficient space to do their jobs well, particularly if it involves having telephone or in-person meetings with clients. In fact, many companies and younger employees highly value open, collaborative spaces. If your business is expanding, consider moving into a space whose open office design can expand with it.

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.

Search and Sign: Commercial Real Estate Resources for Further Reading

As you begin your search for commercial property to lease or purchase, consider adding a commercial real estate broker to your team. His or her market knowledge, property analysis, and negotiation experience can help you make an informed decision that complements your company’s goals. From searching for the right property to signing the lease agreement, here are some additional resources on leasing commercial property:

• For companies expanding or opening new offices, the terms of their lease agreement can dictate the flexibility and growth potential of that office or business. This government guide to leasing commercial space provides tenants with more information about what should be included in your lease and what to know before you begin negotiations.
• When you do enter into lease agreement negotiations, identify the core needs and requirements that you want included in the contract. This guide from Entrepreneur Magazine provides more guidance on how to negotiate a commercial lease, including hiring a commercial real estate broker.
• When searching for commercial property, ask yourself a few essential questions to help you find the appropriate space: Should I buy or rent? Where are my customers, what can I afford, and does this space align with the company’s future goals? For more information about finding commercial space for rent, consult this legal guide to commercial property.

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.

Commercial Real Estate Strategies: Negotiating Your Commercial Lease

Are you preparing to sign or renew a commercial lease agreement? Even if you are resigning an existing lease, be prepared to negotiate with your landlord on the terms of your agreement. Negotiating a commercial lease agreement can help you to achieve more advantageous terms and increased flexibility, positioning you and your company for long-term success. Learn more about successful commercial lease negotiations in this podcast from a commercial real estate broker.

In the podcast episode from 12/4/2009, a commercial broker discusses a few smart strategies for negotiation. Begin by performing a close read of the lease itself and look for points of vulnerability or disadvantage. Your exit terms, for example, will detail when your lease expires, any holdover penalties, and your renewal options. A tenant representative can also perform a lease review to clarify and analyze the terms and conditions of your agreement, providing you with the necessary knowledge for more successful negotiations.

For more information about commercial lease reviews and agreements, 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.

Searching Solo: 5 Common Commercial Real Estate Mistakes

An essential component of your commercial property search can be working with a professional commercial real estate broker. From the initial research to the final negotiations, the commercial market can be fraught with uncertainty and complex choices if navigated without the right guidance. A tenant representative can provide you with expert analysis of market conditions, available properties, and deceptive lease agreements, working to get you the best results at the best value. Those who undertake the commercial property search themselves often make a few key errors, like those below, that can be more costly in the long run.

1. Strategic Errors: Does this property have potential for expansion? Is it in a location that will continue to grow and thrive? These considerations should influence commercial real estate decisions but can be often overlooked by those without the knowledge to answer. An experienced commercial real estate broker can help you locate the property that is most advantageous to your short-term goals and long-term success.
2. Lease Mistakes: Most tenants have little experience negotiating and signing a commercial lease agreement. Without knowledge of landlord practices and reasonable requests, tenants can end up signing expensive and restrictive leases. A tenant representative can work with you to identify your needs and wants, negotiate effectively with landlords, and advocate for the most beneficial lease terms. He or she can also perform a lease review to help you better understand the terms of your agreement.
3. Paperwork Oversights: Leasing or purchasing commercial property requires a great deal of the necessary paperwork, some of which may be overlooked or little understood. With the assistance of an expert on the commercial market and legal guidelines, tenants can file the right paperwork more efficiently and move into their new space in less time.
4. Landlord Conflicts: Dealing directly with a landlord can be problematic for tenants, particularly when it comes to lease agreements. Some landlords can be difficult to work with, refusing to negotiate, and tenants do not always have the experience or knowledge to challenge them.
5. Conflicts of Interest: Many commercial real estate firms represent landlords and developers, which means they benefit most when their clients benefit. To avoid a situation in which your interests are subordinate to those of landlords whose business a firm covets, work with a tenant representative. A tenant representative works exclusively with tenants, aligning his or her goals with your own and advocating for your interests over the landlord’s or interested firms’.

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.

4 Factors to Consider When Searching for Commercial Real Estate

To the uninitiated, commercial real estate listings can appear as little more than a list of names, numbers and schematics. To a professional commercial real estate broker, though, each of those listings tells a story about the space’s value, potential, and fit for your business or office. Talk to your broker and learn more about what to consider when searching for commercial real estate and office space.

1. Building Capacity: When viewing potential office spaces, ask yourself some basic questions about capacity: Is this property large enough to house your entire staff comfortably? Does the layout contribute to conducting business, or is it an impediment to efficient operations? If necessary, look at other offices and study how the space is used and how much is apportioned to each employee.
2. Potential for Future Expansion: Just as your business goals may evolve with time, your space may also need to grow with your vision. Consider whether a commercial property complements your short and long-term goals and if you will have the flexibility to adjust the space as needed.
3. Appearance: An office can be the heartbeat and soul of your entire enterprise. From corporate identity to office culture, the appearance and functionality of your office space can impact how employees and clients see you. If you are expecting a high volume of visitors, for instance, you may want to select a space in a prime location with high-end amenities to create a positive first impression.
4. Cost: One of the most significant considerations you will make when searching for commercial real estate is cost. Working with a commercial real estate broker can ensure that you are receiving accurate and timely market information as you make your decision. He or she can provide you with additional analysis about comparative rent, future property plans, and negotiating  points to help you secure the most advantageous lease for your needs.

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.

Market Metrics: What Drives Commercial Real Estate?

While the current state of the economy has affected both homeowners and investors, the commercial real estate market faces unique challenges and metrics of its own. With extended vacancies not uncommon and tenants looking for new property less frequently, slow economic growth can make commercial real estate an unpredictable industry. Working with a commercial real estate broker can help you better understand and capitalize on the current market. Learn more about what drives the commercial real estate market to help you make a sound decision for your own business, company, or office.

• Industry Growth: As new industries form, startups launch, and jobs are created, the demand for commercial real estate rises. Entrepreneurs will need space to execute new ideas, manufacture products, and transact their services. As industries like oil and gas boom in Denver, for example, the demand for new office space grows. Even as older business struggle or fail, the emergence of new businesses and industry sectors contributes to an active commercial market.
• Increase in Employment: Employment is another key factor of the commercial real estate market. As companies grow, they need more or larger space to accommodate expanded employee ranks. In return, the commercial real estate market often contributes to job growth and increased employment itself. From the hiring of custodial and security staff to the employment of building and asset managers, the economic impact of real estate can be reciprocal.
• Social Demand: As demographics and individual needs shift, so do social needs. When families move to new subdivisions or towns, the demand increases for places to eat, shop, educate, and work. Community expansions and the desire to live near convenient resources like school, shops, and offices can also drive the commercial real estate market.

For more information about working with a commercial real estate broker, 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.

Why Use a Commercial Real Estate Broker?

Even if you have negotiated for and moved into commercial office space yourself before, a changing market and evolving company needs can make each new commercial lease agreement uncharted territory. Working with a commercial real estate broker can help you navigate an uncertain market for an office space that fits your particular short- and long-term needs. In addition to having an expert knowledge of the market, a tenant broker will work with each client to assess, locate, and negotiate for the right office space at the right value.

• Consulting Advice: With his or her intimate knowledge of the market and its trends, a commercial real estate broker can provide insightful guidance on investing wisely. Your broker will help you develop a strategic plan that considers your current needs and future goals, finances, and growth potential. By working with a broker, you can be better prepared to make a sound and strategic decision about which commercial space or investment is suitable for you.
• Trusted Representation: Office tenants, particularly new or inexperienced ones, can feel vulnerable when working with various landlords. An established and dedicated tenant representative can help you objectively analyze market conditions, connect with key players, and take advantage of market indicators. Because a tenant broker represents tenants exclusively, working with one ensures that your best interests are put first.
• Lease Review and Abstraction: With his or her previous experiences working with landlords and a legal team, your broker can help you secure the lease that is most beneficial to you.Commercial real estate contracts can be convoluted, complex, and written to favor the landlord. A commercial real estate broker can use his or her knowledge of landlord practices to detect vulnerabilities during a lease review and to negotiate more favorable terms on your behalf.

For more information about working with a commercial real estate broker, 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.

Generation Y and the Workplace: What Does the Future Office Look Like?

What do young people seek in a workplace? Is the office of the Baby Boomer different from the one that belongs to Generation Y? How do generational preferences influence workplace environment and capabilities? 

Dr. Michael O’Neill, Senior Director of Workplace Research at Knoll, Inc., asks and offers insight into these questions about generational preferences and the workplace in his white paper, “Generational Preferences: A Glimpse into the Future Office”. In the paper, Dr. O’Neill explores the workplace preferences of four distinct generations in different categories, including physical comfort, acoustic privacy, meeting spaces, and engaging workplace. He finds that, as workplaces transition from Baby Boomer preferences to those of Generation Y, four central themes have emerged as guiding principles for how the future office will look and function.

Read the entire white paper by downloading the PDF or viewing it on our Facebook page.

For more information about locating commercial office space, 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.

Networking Tips for a New Year

With a new year come new opportunities for personal and professional development. If you are preparing to make a career change this year or simply seeking new opportunities, networking can introduce you to the people, organizations, and circumstances to make that happen. Instead of merely showing up, make the most out of networking events with some of these tips from the Denver Business Journal.

Networking, writes Garry Duncan, “is about building relationships and helping others as much as it’s about finding leads.” Give yourself a goal for the event, whether it’s meeting a certain number of new people or setting an appointment. Allow yourself to enter into friendly and engaged conversation; others can sense “interest and sincerity” in the questions you ask and the things you say.

For more networking tips, read Duncan’s full piece, “How to Get the Most out of Networking Events”, online: http://www.bizjournals.com/denver/print-edition/2011/11/11/how-to-get-the-most-out-of-networking.html

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.