Tenant and Landlord Representation Services
As businesses expand and contract, tenants and landlords often face decisions that require strategic planning in order to meet their business goals. No matter if the space or tenant is no longer a fit for the business goals. We act as the quarterback in the transactions by helping Tenants and Landlords
- Business operators facing leasing decisions to start, grow or expand.
- Needing commercial real estate listing information on property for lease, sale or investment property in the Charlotte NC market.
- Unhappy about their current lease or space, wondering if it is better to move or renew, lease or buy commercial real estate.
- Unsure of the process and how to best attack it.
- Locate the best commercial space for lease.
- Determine the best strategies to employ when leasing.
- Win negotiations and advance their real estate plans and goals.
The 8 Steps of Commercial Leasing For Tenants
Before you even begin looking, clearly outline what your business needs from a commercial property. This initial self-assessment is crucial for a focused search.
Geographic Area: What specific neighborhoods or regions are most appealing or necessary for your operations and client base?
Building Interest: Are there any particular buildings that stand out to you, perhaps due to their reputation, amenities, or location?
Office Features: If you're looking for office space, is a view important? If so, what's the lowest floor you'd consider?
Square Footage: How much space do you truly need? Consider your current team size and future growth.
Tip: When calculating your space needs, factor in individual workspaces, common areas, meeting rooms, storage, and any specialized areas.
Number of Employees: How many people will be working at this location? This directly impacts your space requirements.
Annual Budget: What's your realistic annual budget for rent and associated costs? Be sure to account for potential additional expenses like common area maintenance (CAM) fees, property taxes, and insurance.
Lease Length: What lease term is preferable for your business plan? Commercial leases often range from 3 to 10 years or more.
Future Expansion: Is the possibility of expanding within the same building or complex important for your long-term plans?
Move-in Timeline: When does your company intend to move into the new space?
Existing Lease Expiration: When does your current lease expire? This will dictate your urgency and negotiation timeline.
Parking & Transportation: What are your and your employees' parking needs? What modes of transportation will your employees use to commute?
Client Visits: Do clients frequently visit your location? If so, consider ease of access, parking, and a professional waiting area.
Desired Image: What kind of image do you want your new location to project to clients and employees?
With your requirements clearly defined, it's time to find properties that fit the bill.
Online Resources: If you're not working with a commercial real estate broker, the internet is an excellent starting point. Searchable websites using keywords like "office space," "industrial space," or "retail space" can provide a good overview of available properties. Take some time to get familiar with how these sites work.
Local Exploration: Don't underestimate the power of local newspapers and simply driving around your areas of interest. Early Sunday morning is often the best time to drive the market; traffic is light, making it easy to pull over and note addresses and phone numbers.
Record Keeping: Use a small tape or digital recorder, or even a digital camera with voice recording capacity. This allows you to quickly capture addresses, phone numbers, and make notes about the building and its location. This information will be invaluable when you make your initial screening calls.
Once you have a list of potential properties, it's time to schedule tours.
Group Tours Strategically: Try to set up your inspection tours in groups of three to four buildings at a time. Allocate about 30 minutes per property plus travel time. This approach helps you compare features and benefits while the impressions are still fresh in your mind. Limiting the number of properties per tour helps maintain clarity and distinction between them.
Document Everything: Bring a camera to take photos and thorough notes during your tours.
Evaluate Key Aspects: Your objective during these tours is to evaluate:
Floor locations and views
Physical characteristics and condition of the space
Available amenities (e.g., common areas, fitness centers, security)
The general character and quality of the building or site
Use a Checklist: Create a checklist to facilitate a thorough comparison of the buildings. This will help you evaluate non-economic aspects and recall specific details, making it easier to narrow down your choices.
After narrowing your choices to one to three strong contenders, it's time to submit a proposal.
Non-Binding Proposals: In many areas, it's an accepted practice to make more than one non-binding proposal simultaneously. This can create competition among landlords, especially in a softer market, potentially leading to better concessions for you.
Communicate Effectively: If you are negotiating for multiple spaces or progressing beyond initial proposal responses and into multiple space planning sessions, it's advisable to inform the property owners. This transparency prevents them from incurring significant expenses on your behalf, which they might try to recoup if you don't proceed with their property.
Letter of Intent (LOI): Proposals for commercial property often take the form of a Letter of Intent (LOI). An LOI outlines the basic terms under which you and the landlord would enter into a formal lease contract. It typically covers key items such as rent, lease term, and any specific conditions.
Next Steps: Once the terms in the LOI are settled, your credit-worthiness evaluated, and any conditions satisfied, a formal lease draft will be prepared.
This step focuses on ensuring the chosen space meets your specific operational needs.
Timing: Space planning usually occurs after an initial proposal has been submitted, though sometimes it's delayed until major deal points are agreed upon and your credit is reviewed. Proposals are often conditioned upon reaching a mutually satisfactory space plan and an agreement on associated costs.
When You Need a Professional: Your need for space planning services depends on the size of your transaction and how much customization the location requires. If any construction or significant modifications are needed, even seemingly simple ones, the services of a qualified professional architect or space planner are essential.
Avoiding Surprises: Construction projects require building permits, which trigger inspections. These inspections can uncover required code corrections. A qualified architect will identify potential problems before you sign a lease, helping you avoid costly and unhappy surprises.
Retail Tenant Considerations: Retail tenants are typically responsible for their own interior improvements and must provide designs for the landlord's approval.
After the owner responds to your initial proposal, it's time to carefully compare all the major points. If you've made more than one proposal, this step is critical for an apples-to-apples comparison.
Rent Rate Comparison:
Rentable vs. Usable Square Feet: Compare the rent rate calculated on both a rentable square foot basis and a usable square foot basis. The usable square footage is derived by subtracting the "load factor" (common area allocation) from the rentable square footage.
Effective Rent: Calculate the effective rent. This involves averaging the rent over all years of the lease term, factoring in any free rent periods or other concessions. This is important because different proposals may have varied rent structures, and effective rent provides a clear, comparable average annual cost per foot.
Operating Expense History: Ask for a three-year history of the operating expenses for each property. Well-managed buildings generally have stable operating expense histories. Unless there have been unusual events like spikes in energy costs, renegotiated janitorial contracts, an insurance crisis, or significant snow removal, the expenses should be relatively consistent. Significant fluctuations warrant further investigation
The negotiation of the actual lease document is one of the most crucial steps in the entire relocation process.
Legal Counsel is Essential: Given the complexity and variations in lease contracts, it is impractical and highly inadvisable to sign a lease without a thorough review by qualified legal counsel.
Lease Structure: Some leases are pre-printed forms, while many are customized contracts developed by the owner's legal team. Pre-printed forms can run from a few pages to over a dozen, plus addenda and exhibits. Custom leases for larger spaces (high-rise offices, large retail, or industrial sites) can easily run 50 to 80 pages.
Beyond Business Terms: While leases define the business terms (which is the smallest portion of the document), the bulk of the lease addresses potential future events and outlines how they will be handled.
Collaborate with Counsel: You will need to work closely with your legal counsel to negotiate the final terms of the lease. This includes:
The language of the lease
The economic terms
All references to interior construction (up-fits or tenant improvements)
Other contractual elements
Ensure Consistency: Make sure that all the terms agreed upon in the proposals are fully and accurately incorporated into the final lease document and reviewed at every stage of the negotiation.
The closing of a lease transaction isn't just an end point; it's the beginning of the lease contract's fulfillment.
Financial Obligations: This typically involves tendering a security deposit, the initial month's rent, and in some cases, up-fit money (funds for tenant improvements).
Deal-Specific Elements: There may be other specific elements of performance outlined in your lease agreement. These will vary based on the unique terms negotiated for your transaction.
How To Lease Commercial Property
- Demystify the commercial real estate leasing process.
- Shows you what to do and how to proceed when you want to find commercial space to lease.
- Takes you through the steps involved in the leasing process.
- Teaches you about the most important business points in a commercial lease and how to create winning proposals.
- Gives you powerful negotiation tips to get you the best lease.
We Represent Commercial Owners of Retail, Office and Industrial Properties who are:
- Unaware about the current market values and trends for their properties.
- Concerned with the length of time to market property.
- Uneasy about the options available to them to maximize their income and investment returns given the current market.
- Sick about having a vacant property.
We act as the quarterback in the transaction for our clients by helping them:
- Determine the best lease rate, term and strategies to lease their properties.
- Execute a winning marketing plan to locate the best tenants and engage in the proposal and leasing process.
- Win negotiations and advance their real estate plans and goals.
The 8 Steps of Commercial Leasing For Landlords
Before you begin marketing your property, clearly define your objectives and the parameters for a successful lease.
Financial Drivers: What financial metrics and goals must the lease satisfy to align with your business plan and investment objectives?
Target Rate & Term: What is the target rental rate and lease term you are aiming for? Is this reasonable and competitive within the current market conditions?
Market Absorption: What is the current rate at which space is being leased ("absorbed") in your market? This indicates demand.
Months of Supply: How many months of available inventory are there in the market? This helps assess market softness or tightness.
Zoning Compliance: What types of uses are permitted by the current zoning regulations for your property? This defines your potential tenant pool.
Tenant Credit Risk: What level of tenant credit risk are you willing to absorb? What are your criteria for evaluating a tenant's financial stability?
Up-fit Budget: What is your budget for tenant improvements (up-fits) or build-out within the space? Will you offer a tenant improvement allowance?
Team & Execution: Do you have the necessary team (broker, legal counsel, property manager) in place to effectively execute the leasing process once a suitable tenant is found?
Tenant Acquisition Plan: How do you plan on finding a tenant? What specific marketing strategies will you employ?
Overall Timeline: What is your desired timeline for securing a new tenant and commencing a lease?
A thorough market analysis is fundamental to understanding your property's position and potential.
Study Comparable Properties: Conduct a detailed study of nearby, similar properties that are currently available or have recently been leased.
Competitive Landscape: Crucially, determine how much comparable space is being offered, at what rates, and for what lease terms.
Synergies: Identify if there are any synergies with nearby tenants or businesses that would make your property particularly attractive to certain types of tenants. Understanding these dynamics will inform your marketing strategy and target tenant profile.
Once you understand the market, develop a clear strategy to attract prospective tenants.
Marketing Plan: How do you plan on marketing the space? This should include both online and offline strategies.
Web Marketing: What is your web marketing plan? This might include listings on commercial real estate platforms, your own website, and social media.
Property Showings: Who will be responsible for showing the space to interested parties (e.g., you, a leasing agent, a property manager)?
Signage: What will the on-site signage indicate? Is it professional, clear, and visible?
Concessions: Are you prepared to offer concessions (e.g., free rent, tenant improvement allowances) if necessary to secure a desirable tenant, especially in a softer market? Have you budgeted for these possibilities?
Once a prospective tenant expresses serious interest, they will submit a proposal to lease.
Formulate Your Response: You will need to carefully formulate your answer to the tenant's offer or proposal (often in the form of a Letter of Intent or LOI).
Unofficial Deal: This communication serves as the unofficial outline of the deal on the table, setting the framework for the formal lease agreement.
Legal Input: Attorneys often use this agreed-upon proposal as the foundation for drafting the final, legally binding lease documents.
This step focuses on ensuring the chosen space meets your specific operational needs.
Timing: Space planning usually occurs after an initial proposal has been submitted, though sometimes it's delayed until major deal points are agreed upon and your credit is reviewed. Proposals are often conditioned upon reaching a mutually satisfactory space plan and an agreement on associated costs.
When You Need a Professional: Your need for space planning services depends on the size of your transaction and how much customization the location requires. If any construction or significant modifications are needed, even seemingly simple ones, the services of a qualified professional architect or space planner are essential.
Avoiding Surprises: Construction projects require building permits, which trigger inspections. These inspections can uncover required code corrections. A qualified architect will identify potential problems before you sign a lease, helping you avoid costly and unhappy surprises.
Retail Tenant Considerations: Retail tenants are typically responsible for their own interior improvements and must provide designs for the landlord's approval.
After you (the owner) have responded to the initial proposal, it's time to thoroughly analyze all major points of the tenant's feedback or counter-proposal.
Compare Multiple Proposals: If you are considering multiple tenant proposals, certain elements need careful comparison:
Rent Rate: Compare the rent rate calculated on both a rentable square feet basis and a usable square feet basis. The latter is derived by subtracting the load factor (common area allocation) from the rentable square footage.
Effective Rent: Compare the effective rent, which is an average of all years of the rent, factoring in any free rent periods or other concessions. This is crucial because different proposals may use varied rent structures, and effective rent provides a clear, comparable average annual cost per foot.
Operating Expense History: It's a good idea to provide a 3-year history of the operating expenses for your property to prospective tenants. You should also be aware of any fluctuations. Well-run buildings typically have stable operating expense histories; unless there's been a spike in energy costs, janitorial contract renegotiations, an insurance crisis, or significant snow removal, expenses should be fairly consistent.
The Commercial Landlord's Guide to Leasing Property
Leasing commercial property effectively requires a strategic approach. This guide outlines the 8 crucial steps for property owners looking to lease out their commercial spaces, helping you attract the right tenants and secure favorable lease terms.
1. Define Your Requirements (Landlord's Perspective)
Before you begin marketing your property, clearly define your objectives and the parameters for a successful lease.
Financial Drivers: What financial metrics and goals must the lease satisfy to align with your business plan and investment objectives?
Target Rate & Term: What is the target rental rate and lease term you are aiming for? Is this reasonable and competitive within the current market conditions?
Market Absorption: What is the current rate at which space is being leased ("absorbed") in your market? This indicates demand.
Months of Supply: How many months of available inventory are there in the market? This helps assess market softness or tightness.
Zoning Compliance: What types of uses are permitted by the current zoning regulations for your property? This defines your potential tenant pool.
Tenant Credit Risk: What level of tenant credit risk are you willing to absorb? What are your criteria for evaluating a tenant's financial stability?
Up-fit Budget: What is your budget for tenant improvements (up-fits) or build-out within the space? Will you offer a tenant improvement allowance?
Team & Execution: Do you have the necessary team (broker, legal counsel, property manager) in place to effectively execute the leasing process once a suitable tenant is found?
Tenant Acquisition Plan: How do you plan on finding a tenant? What specific marketing strategies will you employ?
Overall Timeline: What is your desired timeline for securing a new tenant and commencing a lease?
2. Market Analysis
A thorough market analysis is fundamental to understanding your property's position and potential.
Study Comparable Properties: Conduct a detailed study of nearby, similar properties that are currently available or have recently been leased.
Competitive Landscape: Crucially, determine how much comparable space is being offered, at what rates, and for what lease terms.
Synergies: Identify if there are any synergies with nearby tenants or businesses that would make your property particularly attractive to certain types of tenants. Understanding these dynamics will inform your marketing strategy and target tenant profile.
3. Leasing Strategy and Marketing
Once you understand the market, develop a clear strategy to attract prospective tenants.
Marketing Plan: How do you plan on marketing the space? This should include both online and offline strategies.
Web Marketing: What is your web marketing plan? This might include listings on commercial real estate platforms, your own website, and social media.
Property Showings: Who will be responsible for showing the space to interested parties (e.g., you, a leasing agent, a property manager)?
Signage: What will the on-site signage indicate? Is it professional, clear, and visible?
Concessions: Are you prepared to offer concessions (e.g., free rent, tenant improvement allowances) if necessary to secure a desirable tenant, especially in a softer market? Have you budgeted for these possibilities?
4. Answer Proposals to Lease
Once a prospective tenant expresses serious interest, they will submit a proposal to lease.
Formulate Your Response: You will need to carefully formulate your answer to the tenant's offer or proposal (often in the form of a Letter of Intent or LOI).
Unofficial Deal: This communication serves as the unofficial outline of the deal on the table, setting the framework for the formal lease agreement.
Legal Input: Attorneys often use this agreed-upon proposal as the foundation for drafting the final, legally binding lease documents.
5. Space Planning and Architectural Evaluation
This step involves ensuring the proposed space can meet the tenant's specific operational needs and any necessary build-out.
Timing: Space planning usually occurs after an initial proposal has been tendered, though it may sometimes be delayed until major deal points are agreed upon and the tenant's credit has been reviewed.
Conditional Proposals: Proposals are typically conditioned upon reaching a mutually satisfactory space plan and a review of the associated costs.
Professional Services: Whether space planning services are needed depends on the size of the transaction and the extent of customization required by the tenant.
Construction & Permits: If there will be construction, no matter how seemingly simple, the services of a qualified professional architect are essential. All construction requires building permits, and permits trigger inspections, which could uncover required code corrections.
Mitigate Problems: Using a qualified architect can alert you to potential problems or unexpected costs before you sign a lease. This helps avoid unhappy surprises, especially if you (the landlord) are responsible for the work of improvement.
Retail Tenant Designs: For retail tenants, it's common for them to provide their own interior improvement designs for the landlord's approval.
6. Analyze Responses
After you (the owner) have responded to the initial proposal, it's time to thoroughly analyze all major points of the tenant's feedback or counter-proposal.
Compare Multiple Proposals: If you are considering multiple tenant proposals, certain elements need careful comparison:
Rent Rate: Compare the rent rate calculated on both a rentable square feet basis and a usable square feet basis. The latter is derived by subtracting the load factor (common area allocation) from the rentable square footage.
Effective Rent: Compare the effective rent, which is an average of all years of the rent, factoring in any free rent periods or other concessions. This is crucial because different proposals may use varied rent structures, and effective rent provides a clear, comparable average annual cost per foot.
Operating Expense History: It's a good idea to provide a 3-year history of the operating expenses for your property to prospective tenants. You should also be aware of any fluctuations. Well-run buildings typically have stable operating expense histories; unless there's been a spike in energy costs, janitorial contract renegotiations, an insurance crisis, or significant snow removal, expenses should be fairly consistent.
7. Negotiate the Lease Contract
The negotiation of the final lease document is one of the most crucial steps in the leasing process.
Legal Counsel is Imperative: Given the vast array of lease contracts, it is impractical and highly inadvisable to sign a lease without a thorough review by qualified legal counsel experienced in commercial real estate.
Lease Variations: Some leases are pre-printed forms, while most are customized contracts developed by legal counsel specifically for the property owner. Pre-printed forms can range from a few pages to over a dozen, plus addenda and exhibits. Custom leases, especially for high-rise office buildings, large retail, or industrial sites, can easily run 50 to 80 pages.
Comprehensive Document: While all leases define the business terms (which is the smallest portion), the balance of the lease seeks to contemplate possible future events and prepare for these contingencies.
Collaborate Closely: You will need to work closely with your legal counsel in negotiating the final terms of the lease, including:
The language of the lease
The economic terms
All references to interior construction and tenant improvements
Other contractual elements
Ensure Accuracy: Make sure that all the terms of the agreed-upon proposals are accurately incorporated into the lease document and reviewed meticulously at every step of the way.
The closing of a lease transaction signifies the commencement of the lease agreement and contract fulfillment.
Initial Obligations: This typically involves the tenant tendering a security deposit, the initial rent payment, and in some cases, up-fit money (if applicable per the agreement).
Deal-Specific Performance: There may be other elements of performance outlined in the lease agreement that are specific to your deal. Ensure all agreed-upon conditions are met by both parties.
By following these steps, you can streamline your commercial leasing process, attract suitable tenants, and secure successful, long-term lease agreements.
How To Sell or Lease Your Property For The Highest Price
- How to take control of your asset's profitability!
- Why consider using our services to help you.
- Six critical factors in selling or leasing commercial real estate.
- A proven marketing plan of action that is designed to get you top dollar for your property.