5 Steps to Take Before Signing Your Small Office Lease in Kansas City

5 Steps to Take Before Signing Your Small Office Lease in Kansas City

Before you sign your office space lease, make sure you have taken all of the necessary steps to get the most favorable lease possible. Here are a few things to check off your list before signing the dotted line, as suggested in the article “What Do I Need to Know Before Signing a Commercial Real Estate Lease”:

#1 Know the Jargon

Before tackling lease negotiations, it is important to study up on the terminology you will encounter. For example, you will most likely see the term CAM – Common Area Maintenance, a cost shared among all tenants.

#2 Read the Lease Carefully

Your brain will want to skim a tedious document like this, but take the time to read it closely to make sure everything is in order. Don’t be afraid to ask clarifying questions if there are parts that seem confusing. Carefully note all of your obligations, as well as the landlord’s, as you read.

#3 Prepare Your Business

Make sure that your business has its financial and legal ducks in a row before entering the lease. Don’t forget to file your Articles of Organization or Incorporation, and be ready to provide a guaranty – you will most likely not get out of doing this, but remember that guaranties are negotiable.

#4 Check for Assignability

Check to see that you can assign the lease in the event that you need to sell your business. Location might be a big part of the appeal for a buyer, so if a landlord can terminate your lease over a change of ownership, this decreases the value of your business in the eyes of a potential new owner. Try to include an assignability provision, if only just in the case of the sale of your business, though remember that the landlord will still want to vet the new owner for their financial responsibility.

#5 Negotiate 

This is so important – the lease you were given is not set in stone! As you read the lease make a list of provisions that you still want included or ones that you do not like and talk these over with the landlord – you never know what they might be willing to concede.

Once you’ve found a space and settled on the rent, don’t forget to take these few extra steps before signing the lease!

For information on office lease rates in Kansas City, give Kathy Woodward at DDI Commercial a call at 913-685-4100!


Creating an Environment of Fairness in Your Kansas City Office Space

Employees want to know that they are working for people who are going to handle their concerns fairly.  Here are a few tips for showing your employees that this is a priority of yours as well, as suggested in the article, “Four Ways to Foster Fairness in the Workplace“:

  1. Give equal opportunities for recognition.  Giving recognition unequally can quickly create a negative work environment.  Be aware of how and when you are recognizing employees, especially if you are dealing with multiple sites, and be prepared to adapt—for instance, by holding separate awards celebrations at each site.
  2. Give professional development feedback.  One thing that can create bad blood among employees is the sense that promotions were handed out unfairly.  A successful way of addressing this is by giving frequent feedback to employees.  You might also balance this out with the opportunity for employees to give feedback on management.
  3. Work for transparency.  This is particularly applicable to the compensation system and demonstrates your commitment to fair pay.  Consider constructing statements for your employees that lays out all of their compensation: salary, benefits, bonuses, etc.
  4. Offer a fair process for expressing grievances.  This goes along with allowing for upward feedback.  Create an opportunity for employees to voice their concerns, and make sure they understand the process as well as your commitment to hearing those concerns.

Developing a fair environment will contribute to your employees’ satisfaction and ultimately reduce the number of “that’s not fair” grumblings you have to handle.

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


Choosing a Kansas City Office Space: Step 2

Choosing an office space is a hugely important decision for your business, and can have a major impact on your business’s success and financial state.  The first step in choosing a location is to determine your business’s needs, allowing you to quickly evaluate properties and decide whether or not to pursue them based on if they meet your business’s criteria.  The next step in finding a commercial space involves taking a look at what you can financially handle:

Evaluate Your Budget

Besides determining what kind of space you can afford, there are a few other financial considerations to be aware of:

  • Hidden Costs – Spaces are rarely ready for your business to move right in.  These hidden costs might include things like repairs, decorating, technology upgrades, etc.
  • Taxes – Make sure you are aware of the income and sales tax rates for that state.  Are there property taxes you will have to pay?  Could locating your business across a nearby state line save you some money in tax payments?
  • Government Incentives – Often there are government economic business programs in an area that can provide you with state-specific loans for small business or other financial benefits.
  • Minimum Wage – While there is a set federal minimum wage, many states have a higher minimum wage in place.  You can determine the requirements for your state by looking at the Department of Labor’s list of minimum wage rates by state.

Being aware of unexpected costs and what your budget can accommodate is an important step in determining if a business location is a fit.

If you would like to learn more about office lease rates in Kansas City, give a commercial real estate broker in Kansas City a call at 913-685-4100!


What Kind of Business Space for Rent in Overland Park Should My Business Look For? Part II

If you are looking to move your business into an office rental space in Overland Park, one of the first things you need to determine is what kind of space is best for your business.  There are a few different kinds of business spaces that you can rent, all tailored to different types of businesses and their needs.  Here are some details on two more types of office spaces your business might consider leasing:

#2 Traditional Office
Traditional office space offers self-contained units that typically include things like conference rooms, reception areas, etc.  This offers some privacy for your business and a more robust image than shared space (as in the case of executive suites).  Typically, all of your fees for a traditional office space are included in rent.

#3 Flex Space/Office Warehouse
Some businesses need loading docks or warehouse space, so flex space can be a good option for these businesses.  Flex space, which is also called an office warehouse, has both a warehouse area and office space.  It is typically smaller than a full scale industrial space and often comes without all of the leasing hassles involved in renting industrial space.  These spaces are ideal for smaller businesses and start-ups that need the flexibility of having both a warehouse space and traditional office space.

Make sure that your business is looking into renting the type of space that is most suited to your particular needs and financial situation!

To find out more about office lease rates in Kansas City, give us a call at 913-685-4100!


Commercial Lease Basics For Business Office Rental in Kansas City: Part II

Here are a few more questions to ask yourself as you pursue a commercial lease:

3.    Is your lease a gross lease or a net lease?  Your commercial lease should say what is included in the rent that you pay your landlord.  Typically leases are triple net leases, gross leases, or somewhere in between.  Sometimes leases do not clearly state which category they fall into, so go over your lease carefully to determine this information.  Gross leases are usually all-inclusive, which means that the tenant just pays the landlord one sum and the landlord then takes care of insurance, maintenance, and real estate taxes, although tenant utilities may or may not be included in this lease.  In triple net leases, tenants pay a share of the insurance, maintenance, building utilities, and real estate taxes on top of set rental costs.  Recognizing the difference between these leases is important when looking at multiple spaces so that you can compare the actual bottom line prices.

4.    How is my rate determined?  Your lease should clearly state what the rental rate will be for the duration of your lease.  Typically, this information is presented in a rental chart depicting the annual rent rate and the corresponding monthly payments you will make.  Usually the annual rental rate increase will be based on an exterior formula (i.e. in proportion to the rise in the costs of living allowance) or be a flat amount (i.e. 2.5%).  In the case of a percentage rent, which is sometimes used for retail leases, a tenant pays the annual rental costs plus a percentage of their sales for the year.

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


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!


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.