Knowing something about what to expect from brokers and leases can help your business get a better deal on a commercial office space for rent in Overland Park, KS. Here is a quick guide for some things to consider when working with a broker and renting commercial real estate, as outlined in the article “How to Lease Commercial Real Estate.”
Using a Broker to Find Commercial Property for Lease in Overland Park, KS
A lot of new businesses wonder whether it would be beneficial to work with the broker to find an office space. If you’ve rented residential property before, don’t make the mistake of thinking this is the same as commercial property. The commercial real estate market can be much more difficult to navigate. There are so many more factors to consider when dealing with commercial real estate, such as zoning restrictions. An experienced broker will be able to guide you through these nuances.
But brokers can be a little tricky because typically their commission is paid by landlord, so it’s important to know that the landlord’s interests might be their priority. Here are a few things to be aware of if you do choose to work with a broker:
- Commission – not only does the landlord pay the broker’s commission, but the commission is actually based on a percentage of what you pay for the lease, so brokers will try to show you the most expensive spaces.
- Negotiations – it is not part of a broker’s job to help you negotiate the best deal for a lease, so they will most likely not point out any problematic parts of the lease or areas where you could ask for better provisions.
- Attention – again, brokers are generally motivated by how much the lease will cost, so if you’re looking for a smaller lease, you might get less attention from a broker.
That said, if you’re aware of the downsides of working with the broker going into the process, you can be on the lookout for these pitfalls, but still enjoy the benefits of working with someone who knows the commercial real estate market. You might also want to consider working with a real estate attorney so that you have someone on your team who actually does represent your interests.
Finding the Right Broker
If you can, try finding a tenant broker, which is a type of broker who focuses on working with potential lessees. To find a good broker, you can ask your real estate attorney to recommend someone, or you can ask for referrals from other business owners who’ve successfully worked with brokers. If your business is located a in smaller town where you don’t have the option of working with the broker, then you can use public tax records to find contact information for commercial property owners and contact them yourself.
Be aware of brokers who might want you to sign a representation agreement, which means that they had exclusive rights to show the property to you. This can be a good thing if you’re a smaller business, as it means the broker has more incentive to find you a good space. However, larger businesses renting spaces that will have a lot of commission might not want to limit themselves with the representation agreement.
Types of Office Space Leases in Overland Park
There are few types of leases you might run across:
- Percentage Leases – these are most common for retail spaces, and involved paying a base rental rates plus a percentage of your sales.
- Net leases – for these, you pay a certain price per square foot, plus some or all of the costs of running the property. For A double net lease, you pay taxes and insurance, and for a triple net lease you pay taxes, insurance, and maintenance.
- Gross leases – for this lease, all costs are included in the price per square-foot.
What is Included in a Lease for Commercial Space for Rent in Kansas City?
Not all leases look the same, but there are a few common elements that you will want to discuss with your landlord.
- Lease length – while landlords typically prefer longer leases, tenants want shorter leases with options to renew so that they’re not on the hook for a space that they cannot afford or have outgrown. If you feel like your business is stable enough for a longer lease, this can give you more negotiating leverage with the landlord.
- Subleasing or assignment clauses – this is a good option if you have to leave your space before the lease is over and want to avoid paying a penalty. Subleasing clauses are more common, and they allow you to rent the space to a new tenant even though the lease is still in your name. Assignment means that you can transfer the lease over to a new owner, but this is less common in commercial leases.
- Build outs – if you want to make any changes or improvements to the space, you need to make sure that this is included in your lease and clarify who is paying for these alterations.
These are just a few of the common elements of commercial leases. Before you start the process of working with a broker and finding a lease, prepare yourself by doing a little research on renting commercial real estate so that you know what to expect.
If your business is interested in office space for rent in Overland Park, give us a call at 913-685-4100 for more information about our available spaces.