If you are thinking about moving your business from your home to an office or warehouse building or your business has expanded and you are thinking about getting a larger space here are some things to consider.
Costs will be incurred in moving. These include changing stationary, business cards, phone lines, network, moving expenses, and yellow pages.
Most people say they want high visibility for their businesses but are not prepared to pay the increased cost for such space.
Building owners want some sense of security that you are going to be around. Depending upon the space, owners may want anywhere from a one to five or ten year lease. It is different everywhere, but the norm is usually three years. In that time the owner can recoup the costs of leasing fees and improvements done for the tenant.
While building owners generally insure the building, most all owners require the tenant to have some type of general liability policy for their contents. It also protects the owner if a tenant causes damage to the building or other tenant’s contents.
A building that has sprinklers will often reduce the cost of insurance for the tenant.
Depending upon the building owner the lease rate may or may not include building expenses. You will need to consider if the rate includes gas, electric, common area janitorial, maintenance, water, sewer, taxes etc. These expenses can quickly add up. Most warehouses and office/warehouses have separately metered gas and electric.
Generally, the building owner pays the real estate agency for their effort to secure the tenant. It is usually based a percentage of the gross rent.
Be careful not to get sold on a space that is too large for your needs or a lease that is too long for your comfort. If you anticipate growth a larger space is okay but costs could add up if you don’t need it. Also, you may decide that you wish to be in a different location in a year or two and be stuck in a longer lease.
Often times the building will require a security deposit. This amount is generally close to the amount of the first months rent. It is not the last months rent unless otherwise noted, it shows good faith. It will be refunded after you move out less any unpaid charges or repairs to the unit.
You may wish to alter the space by building more offices in the space. Generally, the owner requires to approve these changes prior to starting a project and will make sure they are current with any applicable building codes.