The Ins and Outs of a Commercial Lease

You're looking for a new commercial space for your business and have located a property that you believe is the best fit for you. Before you sign that lease, there are a few things that you need to consider:

• Rent. Let’s start with the basics! When leasing a space, rent is the equivalent of price per square foot. Nobody wants to pay for space they don't need or pay above market price. Make sure you're able to utilize the entire space and make the most out of your square footage. Also, familiarize yourself with market expectations for lease rates.
• Lease Term. A majority of landlords are looking for a tenant who can commit to an initial term of 2-5 years with the ability to renew the lease. Make yourself aware of when your lease contract begins and ends, as well as when you're responsible for any renewals. You don't want to be blindsided down the road because you didn't have a firm grasp on your lease timeline.
• Net Charges, Unexpected Costs and CAM. If you find yourself in a net lease or triple net lease, you'll find that there are other expenses to consider besides just your base rent. These leases sometimes include taxes and insurance, as well as common area maintenance charges (CAM). Landlords may also make the tenant responsible for major repairs (roof repairs, HVAC repairs and servicing, plate glass window repairs, etc.).
• Rent Escalation. It's common in commercial leases to see an escalation in rent over time. The average increase is between 3-5% annually, or anywhere from 12-15% over a five year period.
• Deposits. Most landlords require a deposit when leasing a space. This could be equal to first months rent. Many times, landlords will also require a tenant to pay the first and last month's rent, especially to a new business whose future may be murkier than that of a longstanding national tenant.
• Buildout. Each commercial property is different - some come delivered as a ready to go space for the tenant, while others will require a lot of modifications in order to make the space work. Negotiate with the landlord and see if he is willing to do any improvements himself (this is called a Tenant Improvement Allowance). Other landlords may do the buildout for you and amortize the cost of the buildout over the term of the lease. Some may not commit anything to a buildout and grant the tenant a rent abatement to offset some of the costs of building the space out. Always explore your options because each landlord is different!

Every lease is different, and they can be complex and intimidating. Remember to always utilize a commercial realtor and a lawyer before signing a lease. Never blindly commit without understanding the fine print!

Cameron Lombardo
RE/MAX Commercial Brokers, Inc.
clombardo@nolacommercial.com
(504) 838-0001  |  (504) 444-7897

Blogging: What Is It Good For? Absolutely Everything

In a world where everyone has a smartphone and access to expressing their opinions, blogging has become the cornerstone of professionals getting their advice out to the public. Blogs can be a great marketing strategy for very minimal cost (if any!) to boost your business, while also educating the reader at the same time.

The important factors in writing a successful commercial real estate blog boil down to five key concepts:

1. Write on topics that are popular and relevant to the current market. Commercial real estate, like any other business, has trends - make sure to keep up with the current market and educate yourself and your audience on what’s up and coming.   
2. Include key words or jargon that will show up in a search engine. Make use of the #hashtag - this allows your content to appear in similar searches, thus boosting your audience.
3. Focus on one key topic to drive home your message. To keep an audience focused, it is always good practice to focus on one topic. Readers can get lost in a sea of information if you are jumping from one thing to the next. 
4. Keep the topic general and do not focus on yourself. Readers are looking for answers specific to themselves. Simplifying your blog so that it's easy to comprehend is also important. Relating to the reader is a must if you want to keep their attention.
5. A good blog answers your readers questions. Make a habit of writing down questions you think your readers are asking. Incorporate these questions into your blog.

Why blog? The answer is simple - it generates more leads to your business while also establishing you as an expert on the topic at hand. People tend to find bloggers more credible on a subject if they are willing to go out there and express their opinion on a matter. It is important to be consistent with how often you blog and allow a comments section for readers to give their feedback. This will establish your blog as brand and generate more leads to successfully increase your business.

Starting a blog doesn't have to be difficult. There are multiple outlets online for creating your own blog. Spend a couple hours each week writing down your thoughts and before you know it, you too will be a #blogmaster.

Peter Lombardo
(504) 838-0001
plombardo@nolacommercial.com