4 Financial Terms You Need to Know When Leasing Kansas Office Space for Rent

Rent is not the only expense you have to plan for when signing a lease for commercial property in Overland Park, KS. There are a lot of different hidden costs and fees associated with a space, so make a list of questions to ask before you actually start looking at office spaces for rent in Overland Park, KS. Here are a few terms to be familiar with that can help you avoid being blindsided by major financial consequences down the line, as defined in the article “Three Things to Keep in Mind with Your Commercial Lease”:

  1. Commercial Rent – This is the rental rate you will find on a listing. You will want to double check this when you visit a space to make sure that the square footage listed is actually usable square footage.
  2. Effective Rent – This is the actual rate you will end up paying during your tenancy and includes factors like tenant improvement allowances, concessions, and escalations over the years. All of these things vary greatly by landlord and property, so you need to get an idea of what these are before truly being able to compare spaces. A commercial real estate broker can help you understand what is common for different markets, so they can be a valuable resource in determining the true bottom line rental rate of a space.
  3. Escalation – This is the increase in rent per square footage your business could be charged after your base year of the lease (usually your first full year).
  4. Expense stop – This is the means of determining escalation; the expense stop is the amount that the landlord pays towards operating costs of the building, and anything beyond that will be charged to the tenant in the form of escalation following the base year.
  5. Tenant Improvement Allowances – This is the amount a landlord might allocate for major improvements to a space, which are becoming more popular in the era of creative zones, cafes, and collaboration rooms. As you’re thinking about your TI, make sure you think about whether you or the landlord ultimately has ownership of the improvements. Don’t invest so much in your space that you are at a disadvantage when lease renewal negotiations come, or negotiate upfront a lease structure that will allow you to best take advantage of these improvements.

Being aware of all of these financial factors is a crucial prerequisite to signing a lease. Not only do you need to make sure that your business has the budget for a particular space, but knowing these different variables will help you more accurately compare spaces to get the best deal possible.

Working with a broker can really help you understand these costs in commercial space for rent in Kansas City, particularly how the market in a certain area affects them. Make sure that the broker you are working with is actually working for you and is not representing the best interests of the landlord.

If your business is interested in looking at Kansas office space for rent, give us a call at 913-685-4100 to find out more about or affordable office space for lease in Overland Park.


7 Things to Consider Before Leasing Kansas Office Space for Rent

There are a lot of factors that go into leasing a new office space for your business. It is tempting to think about just your immediate need for a new space, especially if you are getting cramped in your current one, but it pays in the long run to think about a variety of factors. Before signing a lease for an office space for rent in Overland Park, here are a few things to think about, as suggested in the article “10 Questions to Ask Yourself Before Choosing an Office Space”:

#1 Long Term Needs

Especially if you are a new business, you want to consider the long-term growth of your company and what your needs might be down the line. If your company can afford it, you might consider renting a little extra space – which would put some pressure on you to work hard to fill it. You can also try to negotiate for shorter lease terms with options to renew, or ask your landlord about first rights to renting a nearby space if it becomes vacant and your business needs to expand.

#2 Location of the Office Space for Lease in Overland Park

This is key in any real estate decision.You want to make sure that your new location will still draw your clients or customers – or that there is plenty of potential for a new client/customer base. For example, your business might be getting a deal by moving to the suburbs, but will this be cancelled out by a loss of clients?

Another aspect of location to consider is the effect on your employees. If your new location will necessitate a long or expensive commute for them, you might be in danger of losing employees. Consult with key staff members before making this decision so that you know where everybody stands.

#3 Finances 

Before you even consider renting a space, make sure your ducks are in a row in terms of budget. Particularly if you are a new company, a potential landlord will most likely want to see tax returns, financial references, bank statements, and possibly rent upfront or a bank letter of credit. You will also need to pay a security deposit and maybe even offer a guarantee. Some small businesses need to have owners offer a personal guarantee, but try to avoid this at all costs, as you will then be personally liable if your business can no longer afford the space.

#4 Right Atmosphere

Not only do you want to make sure you are in the right location for your clients, but also that the design of the space itself sends the right message. If your space looks too expensive, clients might be wondering about what their money is really going to, but on the other hand, if your space looks too cheap or dingy, clients might be concerned about whether your business is financially stable.

#5 Accessibility

Does the building have enough parking? What is the cost of parking to customers and employees? Think about how convenient it will be for both customers and employees to park, and try to do things like validate customer parking tickets or get special parking rates for employees. If parking is too much of a hassle, you run the risk of losing both clients and customers.

Also make sure that the building is up to the standards of the Americans with Disabilities Act. If a building isn’t currently in compliance, this could be a huge expense to your company down the line.

#6 Lease Ownership

Make sure you know exactly what will happen in the event that you want to sell your company or move to a different space. Some leases will hold previous owners liable even if they are no longer in the space, so make sure your lease is clear about this, and talk about the possibility of an assignment clause or subleasing.

#7 Lease and Rental Rate Security

Even if you aren’t sure what your business will look like in a few years, you want to negotiate thinking as long term as possible. It would be terrible to get settled into a space for a few years, only to find that the landlord is ready to rent to someone else. If possible, negotiate for options to renew, as well as put a cap on rent increases (for example, no more than 5%).

From looking at potential spaces, to preparing your company, to negotiating the lease itself, there is a lot of legwork that goes into acquiring a new Kansas office space for rent for your company. Do your homework upfront and make sure you know what you are getting yourself into before making any big decisions.

It might also be helpful to work with a tenant broker – there are even some that work with startups specifically – because this person can help you navigate the nuances of the commercial real estate market and lease negotiation.

If your business is interested in office spaces for rent in Overland Park, KS, give us a call at 913-685-4100 to find out more about our commercial space for rent in Kansas City.


Commercial Office Space for Rent in Overland Park, KS: A Guide to Brokers and Leases

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.

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.


Rent Office Space in Overland Park: How to Take Advantage of a Renter’s Market

The commercial real estate world is shifting, and landlords no longer control the game. Recently, businesses have been gaining a huge upper hand in acquiring Kansas office space for rent for great rates. Below are some negotiating tips for taking advantage of this trend and securing an affordable space for your business, as described in the article “How to Get a Good Deal on a Lease”:

Concessions in Your Office Space Lease in Overland Park

Because it is a renter’s market, don’t be afraid to be a bit bold in asking for concessions, including periods of free rent. This is especially true if your business is willing to take a bit of a risk and agree to a longer lease term. Conventional wisdom says that shorter term leases are better for new businesses, but these days landlords are so interested in getting long term tenants that they are willing to agree to a lot more. Since it might take a landlord as much as a year to find a new tenant for a space, they have a vested interest in offering businesses sweet deals to entice them into longer terms.

Create an Exit Plan in Your Lease

The lease a landlord gives you will be heavily in their favor, but that does not mean it is the agreement you have to end up with. Negotiate for clauses to create a little more security for you, and be sure to prioritize your needs. Think about what your deal-breakers are, and focus on pushing for those things before trying to push a long list of changes. Here are a few suggestions for ways to protect yourself in a lease:

  • Guaranteed Selling Points – Sometimes landlords advertise specific selling points, like high foot traffic or a certain occupancy rate, to attract tenants. Try to get these guarantees in writing and ask for concessions if the landlord does not uphold them.
  • Sublease – This is a common way tenants can protect themselves in the event that they want to leave a space or downsize before their lease is up. A subleasing clause allows a tenant to rent out some or all of their space to another, similar business.
  • Personal guarantee release or ‘Good-guy” clause – Most landlords will ask for some sort of personal guarantee, but there are clauses can mitigate the potential damage done if your business has to leave. In a personal guarantee release, the landlord lifts the guarantee obligations after a specified period of time, maybe 2-3 years into the lease. A “Good-guy” clause replaces the guarantee and says that a tenant who defaults on a lease is only responsible for the rent they owe before they leave the space, instead of until the end of the entire lease term. This is fairly uncommon outside of New York, but worth asking for.
  • Exclusivity – This clause protects businesses from a direct competitor moving into the property.

Beware of Hidden Costs For Commercial Property For Lease in Overland Park, KS

Leases come in different forms: gross leases and net leases. Gross leases generally include everything – taxes, maintenance, utilities, etc. On the other hand, net leases involve billing separately for taxes maintenance, insurance, etc., and these things are prorated based on how much space a tenant occupies. Regardless of which kind of lease you enter into, make sure you know exactly what expenses you are paying for, particularly when it comes to common area maintenance. These expenses will probably increase over your tenancy, but you can negotiate to ensure that prices won’t go up within the first year.

Another hidden leasing cost to be aware of is repairs and maintenance. Some landlords want tenants to pay for any repairs or updates to things other than the exterior walls, the roof, or parking lot. This means that the age of a building could really affect how much you end up paying for maintenance and repairs. Have the HVAC systems, electrical equipment, and plumbing inspected before you sign the lease, and bring up any warning signs in your negotiations.

Find Trustworthy Commercial Real Estate Brokers

Be careful about which brokers you trust. Remember that often landlords are paying a broker’s commission, so the broker might be biased in negotiations. Trust your real estate lawyer, and ask them for recommendations of good brokers, as well as have them double check details of your lease.You also want to make sure that the broker you work with has experience with the particular type of commercial real estate you are looking for.

That said, a good broker is essential to negotiating a good deal, since brokers will know the market and what concessions landlords are generally willing to give. Be proactive with your broker and don’t settle for a simple, standard lease.

This is a great time to take advantage of a renter’s market, but it is important to be a savvy negotiator in order to seek out the best concessions and avoid all the pitfalls of a commercial real estate lease!

If your business would like to rent office space in Overland Park, give us a call at 913-685-4100 to arrange a tour of a commercial office space for rent in Overland Park, KS.


5 Things to Know About Subleasing an Overland Park Office Space

5 Things to Know About Subleasing an Overland Park Office Space

A lot of tenants want the option to sublease their office space if necessary—either for financial reasons, because they want to move to a different space, or because they have more space than they need. It is important to account for this possibility in the first place when negotiating a lease, but it is also important to go back review these terms and understand the process before actually starting to look for a subtenant. Here are a few things to know about subleasing a space, as outlined in the article “So You Say You’re Subleasing”:

#1 Landlord Approval

Most leases that allow a tenant to sublet the space still stipulate that the landlord must give consent regarding the new tenant. An important thing to address in your original lease is the this actual consent procedure. When does the landlord give their consent? How do you as a tenant make a request for consent? Do they have to have reasonable proof for rejecting a potential sublessee? Some leases also allow the landlord to take back the space you might want to sublease, which would excuse you from paying rent for that recaptured space. Make sure that if you are thinking about subleasing, you fully understand your lease’s terms regarding this process.

#2 Rental Rates

Often leases allow the tenant to determine the rental rate for the subtenant, although some leases include a profit sharing clause that allows landlords to keep 50% or more of the profits from the sublease, particularly if the rental rate is higher than the original rate. If there is a profit sharing clause in your lease, make sure that you are careful to discuss how broker fees or the sale of any furniture factors into this division of the profits.

#3 Lease Term

The term of the lease for the sublease tenant cannot be longer than the term for the original tenant. However, extensions to the lease term can be a grey area. Often the original tenant is the only one who can negotiate with the landlord for an extension, not the subtenant.

#4 Prime Lease Rights and Obligations

Generally, unless specified otherwise in the lease, a subtenant inherits all of the rights, benefits, and obligations of the original tenant. This includes things like parking rights, insurance costs, tenant maintenance, etc. This also means that any alterations a subtenant wants to make should be in accord with the requirements in the original lease, including the possibility of removing those alterations at the end of their term. Any exceptions to the original lease should be clearly spelled out in the subtenant’s lease.

#5 Relationship Between Subtenant and Landlord

Typically a subtenant has a non-direct relationship with the landlord, which means that the tenant cannot pursue legal action against a landlord if a landlord fails to meet their expectations in a lease—for example, maintaining the building. For this reason, tenants who sublease typically want it included in their lease that the original tenant has to make a reasonable effort to get the landlord to meet their obligations.

If you’re thinking about subleasing your space, be sure to review your original lease and talk to your landlord so you know what your costs and obligations will be. Be ready for a subtenant to negotiate, and make sure the obligations and rights of both parties are clearly spelled out in a new lease so that the transition is as smooth as possible.

Looking for an office space for lease in Overland Park? Give a commercial real estate broker in Overland Park a call today at 913-685-4100 to learn more about our available spaces and even set up a tour!


Office Space Lease in Overland Park from a Landlord’s Perspective

Office Space Lease in Overland Park from a Landlord’s Perspective

When you as a tenant want to rent a space, it is important to not only know what your own needs and concerns are, but what a landlord’s priorities are going to be. An understanding of what the landlord wants out of a lease can help prepare you for negotiations by figuring out the where you might want to fight for what you want and where it would be best to compromise. Here are a few things landlords want out of a lease, as outlined in the article “Focus on Landlords – Key Landlord Lease Issues”:

  • Gross-up Clause. Many landlords want to add a gross-up clause to the lease in order to make sure that they can cover operating expenses that might vary from tenant to tenant.
  • Limited Transfer Rights. You as a tenant might want the possibility of transferring your lease to a third party if necessary, but a landlord might try to retain the right to repossess the space in this situation if they want to.
  • Access to Premises. The landlord will most likely want to be allowed access to your rented premises in the event that they need access to the property for other tenants’ build-outs—for example to run cables, conduits, or pipes.
  • Restricted Special Rights. The landlord will try to limit any special privileges, i.e. the right to self-insure, to only the original tenant named in the lease.
  • Construction Guidelines. The lease might specify that you as a tenant are to carry out any construction on your space in a way that preserves labor harmony.
  • Right to Withhold Consent. The landlord will most likely try to make sure that your avenues for addressing their failure to give consent on something like subleasing, for example, are limited and do not involve any financial liability for them.
  • Lease Document Length. A final landlord angle to be aware of is the fact that landlords usually prefer shorter leases in order to be able to sign tenants quickly. They will most likely present a shorter lease with terms that are more favorable for them in the hopes that a tenant will sign without making too many changes.

As you enter negotiations for a space, be aware of what the landlord is looking for so that you can understand your leverage and the priorities of both sides.

If your business is interested in Overland Park office space for rent, give a commercial real estate broker in Overland Park a call at 913-685-4100!


4 Tips for Your First Office Space Lease in Overland Park Negotiations

Finding an office space to rent for your growing business means opening a new chapter in your future. While the real estate market has been improving recently, there are still some advantages that tenants can leverage in negotiations, and the best way to obtain these advantages is to be prepared. Here are a few negotiation tips to consider, as outlined in the article “How to negotiate your first office lease”:

#1 The Lease Term

One of the most important elements of a lease is deciding the lease term. A stable business should consider a longer lease if possible, because landlords prefer these long-term leases and it will give you a little more leverage in negotiations. However, if you are just starting out, you may not want to commit to a long lease because new businesses typically need some flexibility while their trajectory is still uncertain. Unfortunately, most landlords prefer multiple year leases, so this does lower your negotiating leverage and might prevent a landlord from agreeing to certain requests, for example, improvements to the space. But fear not, there are landlords out there willing to offer short term leases, so be sure to look for those and try to find as many options as you can in order to compare.

#2 Evaluate Your Requirements

Before you start seriously looking at spaces, it is important to have an outline of what kind of office space you want for your business. How many private offices do you want? Do you need break rooms or a kitchen area? Conference rooms? What kind of office design are you envisioning – will desks be in a traditional office layout or a more innovative arrangement? There are pros and cons to both of those office layout options: traditional cubicle setups are more cost-effective, but more open spaces are becoming popular as a way to promote creativity and give an office a modern feel. Other things to consider when coming up with your office space layout is what kind of customer or client interactions you have, and how much privacy is needed.

#3 Study the Market

Do some real research on what is out there before you settle on a single space. A good way to really get a grasp on the market is to work with a professional. Even if you feel like you can find a space yourself, it is helpful to have a real estate broker to assist you in navigating all of the lease terms, clauses, fees, etc. Bear in mind that tenant’s brokers are paid by landlords, so bringing your own representation to the table might help you get the best deal possible.

#4 Work for Favorable Terms

Take nothing at face value, particularly the rental rate of a space. One thing to ask for if you are looking for a longer lease term is a few months of free rent, which lowers the overall costs for you but allows the landlord to still charge the listed rental rate. Also talk to the landlord about allowances for improving or customizing the space. Finally, ask about what options your business has if you grow rapidly during the term of your lease and need more space – for example, can you expand into another space on the property.

As a small business owner, it is important to enter the search for a rental space with an idea of the overall process and what you can do to get the best deal possible.

If your business is interested in business space for rent in Overland Park, give a commercial real estate broker in Overland Park a call at 913-685-4100 to find out about our office space options!


5 Questions You Should Address in Your Office Space Lease in Overland Park Negotiations

An office space is always going to be one of your business’s biggest expenses, so it is in your best interest to negotiate the most favorable least possible. While leases do vary, there are a few common points of discussion that come up in most lease negotiations. Before you sign a lease, here are a few questions to raise with the landlord, as suggested in the article “How to Negotiate a Better Commercial Lease”:

#1 How long is the lease and what is the rental rate?

Remember that landlords usually offer better terms for tenants who agree to longer leases. However, this is not in your best interest as a tenant, because you want to be able to renegotiate the lease or leave if you need to. A good way to meet in the middle is to try to negotiate for a two year lease with several options for renewal.

Try to limit the rent increases for later renewal terms to small amounts based on inflation or the cost of living, rather than on “fair market” price—this price does not take into consideration your years as a stable and loyal tenant. Be cautious with incentives the landlord offers upfront, because this most likely means that you will somehow have to pay more later. Agreeing to base rent increases on the Consumer Price Index (CPI) is one way to protect yourself from unfair or unexpected escalations.

#2 Are there any limitations how how you can use the space?

One thing to distinguish early on is exactly how much of this space you can actually use, since usable square footage is different and notably smaller than rentable square footage. Additionally, leases often include a list of the activities the landlord allows in the space. You might not think much of this if your business only has a single purpose at the moment, but it is to your benefit to request “all illegal uses” in your lease in case you want to expand to other activities as new opportunities arise.

#3 What extra costs are included in your lease?

Just because the rental rate is low does not mean you won’t end up paying a significant amount of money each month. Be aware that your lease could hold you responsible for other costs, including security, utilities, maintenance, repairs, and a variety of other services. The best way to handle this is to try to negotiate caps on the amount you have to pay for any of these extras. Another expense you should address is the cost of making any improvements to the space. Talk to your landlord about what you have permission to do and how the cost of this work will be divided between you.

#4 Do you have first rights to another space in the property?

This can be useful if you have an eye on a better spot in the building or think you might need additional space someday. “First refusal” or “First offer” rights mean that the landlord has to offer you a space and give you the opportunity to accept or reject it before opening it up to a new tenant.

#5 What happens if you need to share the space?

Talk to your landlord about assignment for subleasing options in the event that your business is not doing as well as you hoped and needs to rent out some of your space to another tenant to stay profitable. Make sure you clearly spell out with your landlord what their policy is in regards to subleasing or sharing a space. Be careful of very strict leases that treat a change in leadership in your company or even additional investors as assigning or subleasing the office space.

While you might not get everything you want in a lease, it is important to at least address these issues and consider looking at other spaces if a landlord is particularly inflexible.

If your business is interested in executive office rental in Overland Park, give Kathy Woodward at DDI Commercial a call at 913-685-4100 to learn more about our available spaces.


4 Tips for Rocking Negotiations for an Office Space Lease in Overland Park

Negotiating a commercial lease can be a long and daunting task, but that doesn’t mean you can’t come out of that process with a really great deal. Here’s some tips for being a strong lease negotiator, as suggested in the article “How to Get a Good Deal on a Lease”:

#1 Negotiate the Term of Your Lease and Rental Rate

One of the first things you’ll do is negotiate with your landlord the duration of the lease and how much you will pay, typically based on the square footage of the space. Conventional wisdom suggests that small businesses should play it safe with short-term leases, for example a year or two with the option to renew, but often landlords are willing to make substantial concessions, for example free rent for a period of time, for tenants willing to stay for a longer period, i.e. five years. This is something to factor into your decision-making process. Another thing to do before deciding on your rental rate is to remeasure the space. Sometimes the listed square footage is based on an old floor plan or has been reconfigured so many times that the square footage has changed.

#2 Expenses and Maintenance

The next thing to negotiate is all of the extras you will have to pay for in your space. A lot of this is based on the type of lease that you have, but typically most expenses get passed onto tenants in some form or another. The most common expense is common area maintenance (CAM) costs, as well as utilities. Be aware that landlords will also try to hold you responsible for bigger costs, such as repairs and maintenance, for example of the walls, the roof, and parking areas, and the heating and cooling systems. Be aware of this, especially in older buildings. It might be worth having the heating and cooling system, the plumbing, and the electrical system inspected to look for any obvious problems, which you can then bring up to the landlord as points of negotiation.

#3 Choose a Broker Carefully

Make sure that the broker you’re working with is really working for you. Be aware that a lot of brokers work for landlords and are paid on commission. One reliable source of recommendation is a good real estate lawyer, who can recommend someone who will work with you in good faith. You also want to make sure you’re working with a broker that understands your market, for example the office space market or the retail market. Ultimately, working with broker is very important for small businesses, and trying to negotiate a lease alone won’t necessarily save you money. Utilize your broker in negotiations, but remember that it is also up to you to stay abreast of and verify all of the points they are helping you negotiate.

#4 Have an Escape Planned

Is important to negotiate the details of terminating the lease upfront, even if you hope that never has to happen. There’re a few parts of the lease that can protect you in the event that things don’t go as planned:

  • “Good-Guy” Clauses – most landlords will insist on a personal guarantee, but a good-guy clause in a lease means that you’re only responsible for rent owed before you leave a space if you terminate the lease early, rather than paying rent until the end of the lease term. These clauses are not very widespread, but it is worth asking about.
  • Personal Guaranty Release – you might not be able to get a good-guy clause, but a lot of landlords might agree to release you from a personal guarantee after certain period of time, rather than paying rent until the lease ends.
  • Sublease – this provision allows you to sublease a portion of your space to another business, which could be useful if you end up with space you don’t need and costs that are too high.

A few other provisions hold the landlord responsible for meeting certain standards in order for your lease to be valid:

  • Exclusivity Clause – this clause prevents the landlord from leasing another space in the property to a direct competitor of yours.
  • Co-tenancy – A lot of smaller businesses, especially in retail spaces, rely on anchor tenants to draw in a lot of customer traffic. The co-tenancy clause allows attendants to break their lease without penalty in the event that this anchor tenant leaves and is not replaced by the landlord within a specified period of time.
  • Guaranteed Points – A lot of times landlords advertise the space as having a few guaranteed selling points, such as a certain amount of customer traffic or certain percentage of occupancy. If you can, try to get these things in writing with concessions guaranteed to you in the event that the property fails to meet the standards.

Keep these points in mind as you prepare to negotiate a commercial real estate lease!

If your business is interested in Overland Park office space for lease, give us a call at 913-685-4100 to learn more about our affordable office space in Overland Park.


3 Clauses in an Office Space Lease in Overland Park to Protect Your Business

If you are a new business, it is particularly important to really consider ways to protect yourself when you enter a commercial real estate lease. There are several different clauses you can build into your lease to do this, and here are three of the most common ones, as outlined in the article “How to Find & Lease Retail Space”:

#1 Exclusivity Clause

This clause prohibits the landlord from leasing a nearby space in the property to one of your direct competitors.

#2 Co-Tenancy Clause

This clause protects your business in the event that an anchor tenant leaves the property. An anchor tenant is a business that brings in a lot of customer traffic for other businesses in the property. If an anchor tenant leaves, the co-tenancy clause requires the landlord to replace them within a certain period of time, or else allow you to break your lease without penalty.

#3 Sublease Clause

In the event that your business has to leave the space before your lease term is up, the sublease clause allows you to rent the space to another business, which protects you from penalties associated with breaking a lease.

Think about the best ways to protect your business in various situations as you are negotiating your lease, and consider consulting a broker or an attorney for more advice on negotiating for these kinds of clauses.

If your business wants to learn more about executive office rental in Overland Park, give a commercial real estate broker in Overland Park a call today at 913-685-4100!