business space for lease - Careful market and financial analysis

Buying a building, to house your business is a major decision. Careful market and financial analysis and negotiations are critical to a successful result. Having a highly skilled and experienced professional to provide you the right tools and information will help you make the best and most profitable purchase decisions possible.

But for most businesses, leasing office space is a major commitment. While the cost of office leasing can significantly affect your bottom line, it also has many other important consequences. Some of these include employee satisfaction and productivity, growth constraints and corporate image. For that you need to have a local office space expert in your team, who is in tune with the market and also understands your needs. A local expert with local knowledge and expertise on your side to assist you in leasing office space will ensure you find the right space, get the best deal possible and guarantee you avoid costly mistakes. Thus it will make a big difference in your office space search and negotiation outcome.

Meaning :

Now we must first understand the basic concept of Lease. A lease or tenancy is the right to use or occupy personal property or real property given by a lessor to another person, usually called the lessee or tenant, for a fixed or indefinite period of time, whereby the lessee obtains exclusive possession of the property in return for paying the lessor a fixed or determinable consideration which in normal words can be payment of some amount in terms of money. There can be any other considerations if so agreed by both the parties.

Now as said above lease is the right of one person over a property so it is important to have a clear idea regarding property. Property in the basic sense can be anything either tangible or intangible but from the legal point of view we have two broad classifications of property: -

1. Real Property :- Real property is land or any permanent feature or structure above or below the surface. Ownership of land is an aspect of the system of real property or realty in common law systems (immovables in civil law systems and Conflict of laws).

2. Personal Property :- All other property is considered personal property or personalty in common law systems (movables in civil law and Conflict of Laws), and this property is either tangible or intangible, i.e. it is either a physical property that can be touched, or it is an enforceable right like a patent or other form of intellectual property.

It is to be remembered that lease is given only in regards to property and in lease we have two parties, the lessor and the lessee.

1. Lessor :

Lessor is a person who gives the property on lease. He is the owner of the property and he gives his property on lease in return for some consideration. He has the power to terminate the lease if the conditions that has been mentioned has not been fulfilled or if there has been any breach of any conditions.

2. Lessee :

Lessee is a person who enjoys exclusive rights over the property which has been leased. Exclusive right means that he has the right over the property to exclude anyone with regards to that property and also has a right of action against any person trespassing.

Business space The leasing process :

An experienced and reliable tenant representative can make a huge difference in the successful outcome of your search for office space. A Tenant renting office space does so only a few times in his corporate life. Landlords rent space over and over again. Level the playing field by taking advantage of the availability of a good tenant representative. You will find that there is usually no cost to you. In the long run, you will end up way ahead in not only the rent you pay but also in avoiding mistakes. Dont be afraid to ask your prospective brokers questions to make sure they can perform for you.

1. Define basic space requirements :

You need to first understand your basic space requirements such as size and layout, expansion and option space, price and term i.e. the market information, image and quality, geographical area and intangibles and goals.

2. Selection / interview with support team :

An interview with the support team will help you in determining and understanding the space planner, interior design if desired and also the legal provisions regarding the lease of the office space.

3. Determine alternatives available :

in this step you need to gain general market knowledge of "deals" available. You should also verify the terms and the conditions that you want to place so that they dont go against any provisions of law. Finally review the list of alternatives that you have.

4. Narrow down alternatives :

While choosing the alternatives you need to keep in mend the following things:

• Inspection tours of likely alternatives

• Selection of 3 - 5 best alternatives

• Space planning of best alternatives

• Review and re-draw of space plans

• Selection of top 2 - 3 alternatives

• Request for proposals on top alternatives

5. Analysis of proposals and alternatives :

After selection of the proper alternatives you need to analyze the financial aspect of it. Also you have to make a proper analysis of intangibles and goals.

6. Final selection :

Now it is the time to make a final selection and regarding that you need to do the following things: -

• Choose top alternative

• Establish terms required

• Prepare and present counter-offer

• Approve, re-negotiate, or select other alternative

• Review lease for business points

• Review lease for legal points

• Re-negotiate lease terms

• Sign lease

Get started :

Though giving business space for lease is not an easy task but if you have the proper people and the proper intelligence around you, who will help you in making a good decision, then youll never face a problem. So it is advisable that you take assistance from a knowledgeable and experienced commercial real estate office tenant representation expert.