The Recession of the Late 2000s was certainly not an ideal turn for small businesses, but times of economic crisis do have on advantage for businesses: it is often a great time to hunt for office space for lease in Overland Park, KS. This has been especially true for small businesses, since larger businesses are downsizing and often subleasing spaces. For small business who act quickly, there is the possibility of being able to choose between multiple offers from landlords, and even leverage those different offers into negotiation power. Here are a few key tips for small business who want to take advantage of this renter’s market, as suggested in the article “6 tips for renting small business space”:
#1 Look for small Kansas office space for rent
One result of an economic downturn and a tenants’ market is more available spaces for businesses, but typically small ones. Landlords are looking for security and want to diversify their leases, so they are starting to look for a variety of small tenants rather than just a few big ones, which means they are splitting up previously big offices into smaller spaces for small businesses. This means the best deals are for small spaces, so keep an eye on that market and take advantage of investigating and comparing several options.
#2 Use your negotiating power
Never accept the listing price on a lease. Because landlords are especially hoping for higher rental payments in a tough economy, it pays to be on your guard for too-high prices. While you might not be able to get the rent itself lowered, you might be able to negotiation for concessions, such as an allowance for improvements or a period of free rent. This means the landlord doesn’t have to back down on the rates they are asking, but you can still get more value for what you end up paying.
Other things to negotiate for include a cap on annual increases (to protect yourself from inflation and rising rates), expansion options, management fees, and even bonus items like parking or snow-clearing services.
#3 Be picky about the lease term
While landlords generally tend to favor longer leases, in a tenants’ market you are much more likely to get the length you want, so don’t be afraid to ask. On the one hand, this could mean that if you are a startup business you have the flexibility of signing a short lease so that you are not stuck in the unfortunate event that your business fails or the fortunate event that you outgrow a space. On the other hand, if you foresee a stable future for your business, you have the opportunity to take advantage of long term cheap rent with a longer lease.
#4 Do your research on office spaces for rent in Overland Park, KS
One element of the research you should do is learning about your market. The best way to do this is to see a lot of different spaces so that you know what rates and amenities are out there and you can make educated comparative analyses – keeping track of details on spreadsheets is a good way to do this.
Another aspect of research is looking into the landlord of a property. Creditworthiness of landlords could be questionable in a rough economy, so it is important to know where your business owner stands. Are they in over their head with loans? Debt? You might find out a little more by running a credit check, as well as gathering some information from current tenants in the building.
Part of doing good research might also be working with a broker. In a tough economy, often landlord are willing to make a lot of concessions, and an inexperienced tenant might not even know to ask about certain things, like escalator clauses, more favorable termination terms, or mitigating personal guarantees. A broker can be in your corner and make sure that you don’t get taken advantage of.
#5 Be prepared for security deposits
Unfortunately, while a lot of aspects of leasing are favorable for tenants during an economic downturn, slack on the security deposit is not one of them. Landlords tend to be even more concerned about this because of the high level of risk. Not only are you concerned about your landlord’s credit trustworthiness, but they are extra concerned about how much of a risk you are. Be prepared to pay as much as 10% of your total lease as a security deposit, as well as submit a letter of credit or even offer a personal guarantee. This is especially important to landlords who make a lot of concessions, such as improvements or repairs to a space, because they don’t want to sink that money into a space only to get it back in just a few months.
Economic downturns are rough on small businesses, but for business owners who can read the market, they might just have long-term benefits in terms of cheap commercial real estate.