Commercial Realty in Kansas City | Southcreek

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!

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!

10 Money Saving Ideas for Small Business Looking for Commercial Realty in Kansas City Part II

Growing businesses need to save all of the cash they can—especially if they are considering a move into a new office rental space. Here are some more tips for tightening up your finances:

6.   Avoid high bank fees. Banks these days are trying to make more money off of fees to compensate for all of the new regulatory changes. Do everything in your power to steer clear of bank fees that are avoidable, such as bounced check fees, ATM surcharges, and debit-card fees. Consider even switching banks if you think you can save more money by doing so.
7.   Think about bundled services. Sometimes companies can bundle services such as phone service, internet, cable, fax, and web hosting. Your business could potentially save hundreds of dollars per year by bundling just two or more services from the same company.
8.   Use payroll debit cards. Your business can cut back on administrative costs by using a debit card payroll system, which bypasses the expense of printing checks and even lowers fraud risks.
9.   Keep track of employee spending. Employees at any level could be misusing or abusing company credit cards. Avoid these issues and save money by setting guidelines, monitoring monthly spending reports, alerts, and activating preset limits.
10.   Use electronic invoices. You can email invoices (e-voicing) directly to your customers, which will reduce your business’s printing and postage expenses.

Saving money in a multitude of little ways can add up for your business, and potentially allow you to save up the money to move into a bigger and better office rental space in Kansas City.

To find out about our available office spaces, call Kathy Woodward at DDI Commercial at 913-685-4100!

10 Money Saving Ideas for Small Business Looking for Commercial Realty in Kansas City Part I

Is your small business wanting to move to a bigger or better location, but unable to afford to do so yet? Here are some creative ideas for how to save money in order to be able to make moves that will lead to a better future for your growing business:

Go paperless. You can decrease printing and storage costs, as well as improve overall efficiency, by going paperless in your office. You can save your business both time and money by scanning documents, which allows you to send and share information much more easily.
Lease office equipment. You can avoid the big upfront costs you would have to pay if you bought office equipment by leasing instead. Leasing equipment would also save your business money on upgrades, repairs, and equipment maintenance, since often equipment leases cover these expenses.
Use a 0% credit card balance transfer. You might consider transferring your debt balance from one card to a 0% APR card in order to pay off your debt while saving money on interest charges.
Collect cash in advance. When you extend credit to customers, think about asking for a percentage of cash up front with all purchases. Doing this could help your company improve cash flow, downsize risk, and save money on having to collect.
Ask for discounts. Your suppliers may be able to offer quantity discounts of up to 50% or more depending on your terms. You might be able to meet these terms and qualify for lower prices. Talk to your suppliers about these discounts and what you can do to earn them. Your business might be able to get benefits such as a major discount for paying early or a loan without interest in the form of a vendor credit.

Little tips like these could save your business money and get you one step closer to moving into your ideal office rental space in Overland Park!

To find out more about affordable office space in Overland Park, give us a call at 913-685-4100!

Distinguishing Between On and Off-Balance Sheet Financing for your Commercial Realty in Kansas City

Previous posts have discussed the difference between capital leases and operating leases for office equipment, as well as the benefits of an operating lease, which offers an off-balance-sheet financing option. However, it is important to note that the rules for properly distinguishing between on-balance-sheet financing and off-balance-sheet financing must be strictly followed. To make sure that businesses are following these accounting rules, the Financial Accounting Standards Board created a list of four conditions for when a lease must be treated as a capital lease:

1.   The ownership of the equipment or asset transfers to the lessee when the lease term is over.
2.   The life of the lease is longer than 75 percent of the life of the asset.
3.   The current value of the lease payments (factoring in an appropriate discount rate) is greater than 90 percent of the fair market price of the asset or equipment.
4.   The lessee has the option to buy the asset or equipment for a minimal price when the lease term ends.

It is important to properly determine which kind of lease you are using for your office equipment, and since these rules can be complex, it might even be wise for your business to consult an accounting or financial professional as you make these financial decisions.

Want to learn more about office lease rates in Kansas City? Give us a call at 913-685-4100 to find out about our wide variety of affordable office suites for rent in Kansas City.

The Pros and Cons to Subleasing Commercial Realty in Kansas City

There are a few different pros and cons to subleasing commercial space for lease in Overland Park:

Pros:

Taking over another company’s space can be a great way to get a short term lease at rent rate that is below the market value. Sometimes you can get a sublease for 10-50% less than the regular lease rate. The shorter your sublease term, the lower the rate.
Sometimes the outgoing tenant might be relocating to a different state or going out of business and might be willing to sell your business their office furniture and equipment at a good price.

Cons:

The downside to signing a shorter sublease is that your company will most likely have to move out at the end of the least term (whether you have outgrown the space or not), or pay the current market price to remain in the space. If the market price jumps up 30% during your year-long sublease, you might wish you had signed a five-year lease.
The subleased space usually comes as is, which means a landlord will not provide tenant improvements like private offices or new carpet. Your business will have to pay for any necessary improvements, which might not be a cost efficient path if you are only planning on staying in the space for a short time.

Consider these different benefits and downsides of renting a subleased space as you search for your best office rental space in Kansas City option.

To learn more about Southcreek’s available spaces, give us a call at 913-685-4100!

Broker’s Fees for Finding Commercial Realty in Kansas City

If you are thinking of working with a real estate broker, you might first want to find out a little about their fees. Here is some more information about what commercial real estate brokers charge:

The broker’s fee usually corresponds to the size or complexity of the transaction. There are some standards in the industry for brokerage fees, but since it is a commission-based arrangement, often the fees will vary.
Fees usually consist of a percentage of the financial value of the lease being negotiated. Often leasing commissions are about 5-6% of the aggregate lease value, which is the term of the lease plus monthly rent. Usually these fees are limited to only the first 10 years of the term.
Fees are often negotiable, but property demand will factor into the likelihood of you getting a lower fee. For instance, a broker may lower a fee in a depressed real estate area just to make a sale.
Be sure you know in advance exactly what you are getting charged in advance, and be aware of any additional fees for performing a search, listing a property, or any other services.

Be sure to check carefully into what you are being charged for and know what is a normal price when you begin working with a commercial real estate broker.

If you would like to learn more about commercial space for lease in Overland Park, give a DDI commercial real estate broker in Overland Park a call at 913-685-4100!

Since real estate agents and brokers are in this business to make money, they can, on occasion, put their own needs ahead of yours, by turning down potential deals from which they cannot make enough money on a commission. This is neither ethical nor legal. Make sure that if you’re selling a property, the agent or broker adheres to the law and tells you about all offers, even if some are low and won’t yield the hefty commission checks they’d prefer.

6 Basic Steps for Finding Commercial Realty in Kansas City

Are you looking to relocate your business to a new rental space, but wondering how to conduct that process? Taking time to thoroughly plan and execute your search for commercial space can help you find a space that will satisfy your business’s needs for the duration of a lease without unexpected hitches. The Center for Commercial Real Estate offers a few basic steps to potentially keep in mind as you start your search for new office space:

Determine your space requirements and analyze your business’s needs. This includes considering location, service and amenity requirements, components of the space, and staffing projections.
Survey the market. An organized approach to this step can help provide you with a more clear comparison of the spaces you are considering.
Selection of most qualified spaces. This involves narrowing down your list of potential options based on your original needs, including location and amenities and services, as well as a consideration of the background of the current landlord.
Perform technical property review and take a physical tour. It is helpful to take notes on each of your top spaces as you tour them in order to remember details later.
Conduct the proposal process. Distribute your Request for Proposal (RFP) to various potential landlords, review their responses, and evaluate this data alongside your data about the space and the history of the landlords.
Begin negotiations. This potentially includes making a negotiation checklist, seeking input from legal counsel, and finally creating and executing the lease document.

If you are looking at commercial MLS listings in Overland Park, give one of our commercial real estate brokers in Overland Park a call at 913-685-4100 and let us talk to you about whether Southcreek might be a good fit for your business’s needs!