commercial real estate broker in Kansas City

Operations and Management Administrative Fees for Office Space in Kansas

If you are already paying CAM fees as a tenant, beware of any added fees for operational or management costs. These fees might be labeled as “Administrative Fees,” and are a landlord’s way of trying to get a tenant to contribute to his or her own costs. These administrative fees are typically based on a percent of total CAM costs. As a tenant, you will want to object to such costs, or at least see evidence of how your share of these fees has been calculated. Most tenants object to O&M fees because the landlord already makes a profit off of the rent tenants pay, even without the CAM fees. Here are some tips for dealing with these extra fees in a lease:

If your CAM fee includes O&M fees that go towards liability insurance costs, the salaries for administrators or management (on or off-site), advertising, or professional services (i.e. legal or accounting), you should try to negotiate these specifically out of our lease.
Savvy negotiating tenants will try to reduce the percentage of these fees (which can range from 5% to 25%) and eliminate costs that are not related to maintenance (i.e. utilities, insurance, taxes).
You could try to argue that repair and maintenance costs related to buildings (i.e. roofs, foundations, exterior walls) are not your responsibility because they are not common areas used by you and your customers.

You might not be able to eliminate these fees entirely, but be aware that they might be in your lease and you might be able to at least negotiate their reduction.

If you are looking for affordable office space in Kansas City, give a DDI Commercial real estate broker in Kansas City a call at 913-685-4100 to talk about our available spaces!

Leasing Terms to Include in a Counter Offer for Office Space in Kansas City

A counter offer requires that you provide some details about your business, but the essence of the letter is to address important lease terms, such as lease length and renewal options or property improvements. Here are some tips on addressing some of these major points in a counter offer:

Length of the Lease. Be very clear about the lease length terms you are asking for—a two-year lease with three, one-year options to renew is different than five straight years with no renewal options. Typically landlords prefer leases that are 2 years or longer, but it could not hurt to ask for a one-year lease. These often cost more and might have less renewal options, but at least you will not be locked into a space. Since there is a chance your business might outgrow the space, or might struggle and need to find a smaller space, you will want to leave yourself the option to get out of that space quickly, and remember that breaking a lease can be costly.
Condition of the Property. Be clear as to whether you want the space as is, or if you need the landlord to repair or improve it first. If you are planning on doing renovations yourself, include this in a lease, because sometimes the landlord will give you an incentive or allowance for improving the property. If you aren’t sure if this particular landlord will do this, keep things open and offer to submit more details about your plans at a later time, after you hear more about considerations a landlord might offer for renovations.
Occupancy Date. Tell the landlord when you want to take physical possession of the property, which could sometimes be a different date than the date you begin paying rent. You might even be able to negotiate a month of free rent by having your move-in date be a month before the date the lease actually begins.

Be sure that you know what you are getting yourself into with each of these terms so that you know how to address them in a counter offer!

If you are looking at commercial realty in Kansas City, give a DDI Commercial real estate broker in Kansas City a call at 913-685-4100 to learn about our available properties!

Information to Include in a Counter Offer for Office Space in Kansas

A counter offer letter is both a chance to ask for different terms that are better for your business and for you to show the landlord that your business is the best choice over other potential tenants. Here is some information that you should typically include in a counter offer letter:

Your Business’s Name. Both the name that you are legally established under and any other names you might be doing business under.

The Structure of Your Business. Let a landlord know where you are incorporated, if you are incorporated, or tell them if you are a tax-exempt organization. Landlords rarely offer nonprofit organizations freebies or perks just for a tax write-off, but they may be inclined to negotiate or lease with an organization with a noble cause over other potential tenants.

The Age of Your Business. If you have only been in business less than two years, you might want to give the landlord some information about your success so far, or your projections for future growth. A landlord might be unlikely to rent to your business without a personal guarantee if you cannot provide some evidence that your business has been doing well.

Check back to a later post for some more important pieces of a good counter offer!

If you are looking at office suites for rent in Kansas City, give a commercial real estate broker in Kansas City a call at 913-685-4100 to talk to us about what kind of space your business needs and how we can match you up with the best available space for your business!

How to Counter Offer for an Office Space Lease in Overland Park

Here are some suggested steps to take when preparing a counter offer for a commercial lease.

Try to counter offer more than one space at a time. This might require more work for you, but it ensures that you have options and might give you an upper hand in negotiations if the landlord knows you are considering multiple spaces.
Measure the space yourself. If the listed square footage is not accurate, you can potentially lower the cost in the counter offer by using the actual size.
Reduce the length of the lease term to as short as possible. Unless you are being offered a really good deal on long term rent rates, a shorter lease is better in case you need a larger space or your company starts to struggle at some point, because breaking a lease is expensive.
Try to cap the year-to-year rent increases that are included in most commercial real estate leases, because they might not be accurate since they are based on possible vacancies or projected increased operating costs.
Ask for a clause prohibiting spaces in the same building from being leased to businesses that compete with yours.
Try to include wording that lets you sublet the space just in case you have to move out before your term is over. This could be helpful in the event that your landlord insists on a long-term lease.
Try to avoid a personal guarantee. Ideally, you want to get your business name as the only one on the lease, but recognize that many landlords will insist on a personal guarantee, so you might have to concede this point.

Keep these suggestions in mind as you think about what you want to include in your counter offer!

If you want to find out more about available Kansas City office space, give a commercial real estate broker in Kansas City a call at 913-685-4100!

Checklist of Conditions for Your Office Rental Space in Kansas City Lease: Part II

Don’t forget to go over all of the information in your lease before you sign it to make sure that everything you might want included or have questions about is clearly covered. Here are some more suggestions for things to be sure to look out for:

The monthly rent rate—how much you will have to pay, what it does and doesn’t cover, and how it is calculated.
Any additional fees that might be required of you (i.e. parking lot maintenance, percentage of profits—anything you might have to pay in addition to monthly rent).
When your rent is due and how it needs to be paid (mailing address, in person, etc.).
How much late fees might be and when they are incurred. What to do in the event that the payment due date falls on a Sunday.
What insurance you are required to have at the signing of the lease and during the lease term.
Will anyone have the right to access your space without your permission, and if so, under what circumstances might this occur and who would it be?
Unless your lease specifically tells you that you can share the space with another business or sublease, you cannot. If you would like to sublease you must make sure that it is stated in your lease that you have this privilege.

Be sure to look for these things and a few other important provisions in your lease before you sign the dotted line!

If you are on the hunt for commercial space for lease in Kansas City, be sure to give a DDI commercial real estate broker in Kansas City a call at 913-685-4100 to find out about Southcreek’s available spaces!

Four Steps to Take Before Signing an Office Space Lease in Overland Park

Think you are ready to sign your lease? STOP and make sure you take a few important steps before finalizing the deal!

Step 1: Read and Understand Your Lease
Be sure you take the time to read every word of your commercial lease. If there is a term in the lease that you do not understand, ask for a lawyer or a knowledgeable and disinterested party to clarify it for you. Do not rely on a landlord or listing agent to explain the lease to you, because they could be misleading you intentionally, or might not fully understand the content of the lease themselves.

Step 2: Perform a Walk-Through
Do a “walk-through” of the property before you officially lease it. You will want to note anything that is wrong that the landlord should upgrade or repair, taking photographs of any existing damage so that you will not be accused of causing it and have to pay at the end of your lease.

Step 3: Make Sure Repairs are Done Before Move-In
If any work does need to be done on the property, make sure the landlord gets it done before you sign the lease. If work has to be done after you move in, make sure the lease details the completion times for this work. Otherwise, you have only promises from the landlord and could potentially find yourself unable to use the space for weeks at a time because of construction.

Step 4: Make a Checklist
Make a checklist of the information you absolutely want to see in a lease and make certain that it is included. Check back for another post with suggestions for what should be on this checklist!

Following these basic steps could save your company money and hassle in the long run!

If you are wondering about office lease rates in Kansas City, give a DDI commercial real estate broker in Kansas City a call at 913-685-4100!

Types of Commercial Realty in Kansas City

Commercial real estate is land, facilities, or property that is set aside for business purposes and usually cannot be used as residences. There are several different types of commercial property; here are a few common ones besides traditional high-rise and low rise office buildings:

Business Parks – This type of space is most commonly leased by service professionals such as doctors. A business park is a handful of buildings intended for general use business purposes as well as light industrial use. Usually these parks offer cheaper rent than retail spaces and are similar in price to industrial parks.
Industrial Parks – This type of commercial real estate is comprised of buildings divided into units that are usually warehouses or big, unfinished spaces. These parks are typically zoned for heavy-industrial use, such as manufacturing. However, they can also be used for other types of businesses and sometimes have store-front window exposure. Small retail businesses that are just getting started have started to pursue these spaces because they are usually cheaper than other types of commercial properties and are often extremely similar to buildings from business parks, with the exception of large, garage-style doors.
Commercial Retail Property – This type of property includes facilities made for store-front types of businesses and includes malls and strip malls. Many of these retail business owners lease property in business or industrial parks in addition to their commercial retail property.

When you consider these different commercial property options, two factors that might help you narrow your search are location and type of lease being offered, as well as what kind of business you intend to do in the space.

Looking at office suites for rent in Kansas City? Give a commercial real estate broker in Kansas City a call at 913-685-4100 to find out about Southcreek Office Park rental property!