Monthly Expenses for a Triple-Net Office Space Lease in Overland Park

If you’re looking to lease a commercial office space, one of the first things you have to do is plan your budget. In order to do this, it is helpful to know what your monthly expenses will be in an office space. Having an idea of the different fees and costs associated with a space can help you narrow down your options as you search. Here are a few things to consider, as outlined in the article “How to Find & Lease Retail Space.”

One aspect of your monthly costs is the different factors that contribute to your rental rate:

  • Location. Location has a major impact on the monthly rental rate of the space. One aspect of location is how close you are to central hubs of activity. An area that has higher customer traffic means higher rent, both in big cities or in smaller towns. Another aspect of location is the surrounding businesses. If there is a large anchor tenant on your property, you might have to pay more. Also, if you have a prime space near the parking area or facing a main street, You will probably have to pay more then if your space is less visible.
  • Quality of the Space. Another obvious factor is the quality of the space. A place that is move-in ready will be more expensive than a space that you will need to renovate or remodel, but be sure to factor in the cost of improvements and what the landlord will contribute to these costs.
  • Vacancies. A property that has multiple vacancies will probably offer cheaper rates then one with less available space. However, they’re in mind that if it’s a new property it might still be expensive even if it currently has multiple vacancies.
  • Length of Lease Term. If you’re looking for a longer lease, you are more likely to get a better deal on your rental rate. A long lease means more bargaining power, which means that you can try to ask for a reduction of your lease payment or or other costs. On the other hand, a very short lease, such as one year term, means that you have almost no negotiating leverage.

Factors that influence rent are not the only things that you need to consider when planning your monthly budget. Often there are a lot of other costs associated with your lease. These costs will depend on the type of lease that you have. Here are a few monthly expenses you should expect if you have a triple net lease, one common type of lease:

  • Utilities. As with any property, don’t forget to take into consideration utilities, including water, electricity, heat, sewage services, internet services, and any others. You can check with your landlord to see if they have estimates for these monthly fees, but if not you can always call the providers of these services to get a quote.
  • Maintenance. This is something that you should definitely discuss with your landlord upfront to make sure you know who is responsible for what elements of maintenance. You will most likely want to factor in heating and cooling systems repairs, lawn care services, snow removal and any other common issues you expect to encounter. You will also want to consider whether you have common area maintenance costs–fees to take care of spaces that you share with other tenants.
  • Taxes. In a triple net lease, you will be responsible for paying a portion of the property taxes. You should be about to get this information in advance either in the listing or from your broker.
  • Insurance. You will also have to pay a portion of the property insurance, and you can also get a quote for this from either the landlord, your broker, or a local insurance company.

Aside from the factors that affect your rent and your monthly costs, there is one more expense to factor into your budget as you look for space:

  • Broker’s Fee. Don’t forget to plan for a broker’s fee if you plan to work with the broker. There are a few different ways that brokers calculate their rates. Often they charge between 7 and 10% of the total cost of the lease. Another system would be charging you per square foot, which might also depend on the length of the lease term.

If you’re starting the process of looking for a commercial office space to lease, it is important to try to plan your budget before you even start looking. If you have a good idea of your monthly costs as well as what a broker’s fee will be, you can start to look at properties that are in your price range, rather than wasting your time and energy looking into spaces that you will not be able to afford.

If you would like to learn more about office lease rates in Kansas City, give us a call at 913-685-4100. We can also tell you more about our affordable office space in Kansas City, and you can even set up a tour!

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4 Tips for Choosing an Overland Park Office Space Location

There are a lot of steps in finding the best commercial space for your business, and besides determining your budget and what you need in a space, location is another extremely important factor. Here are a few tips for choosing the best location for your business, as recommended in the article “How to Find & Lease Retail Space”:

#1 Safety

Obviously a main concern is going to be choosing a safe location, both for the benefit of your customers/clients and your employees. If customers feel unsafe, they are not going to want to visit your business, and employees need to feel secure when they enter and leave the premises, or you are going to have a difficult time recruiting and keeping staff. There are resources available, for example mylocalcrime.com, that can help you determine if the area where you are looking is safe.

#2 Accessibility

Make sure that you take into account what highways are near your space or if there is easy access to you through public transportation. This will make you more visible and guarantee that both customers and employees can reach you.

#3 Customers

It is important to know where your customer/client demographic is located and try to find a space near this target group or in a place that they will visit. Accessing government census information for an area online is one way to gather data on the population surrounding a space.

#4 Other Businesses

It is important to also take into account what other businesses are nearby. One thing you want to consider is whether there are compatible businesses near the space, which will make your location more appealing. It might seem odd, but you might also consider choosing a location near competitors, because this will guarantee that customers interested in your type of business will be passing through the area. This could be especially beneficial for your business if you are new and still working on building your reputation and attracting customers.

If you are interested in renting commercial real estate and you have already carefully planned your budget and considered your needs, considering the pros and cons of various locations can be a great way to narrow down your options!

Want to learn more about office space for lease in Overland Park? Give us a call at 913-685-4100 to learn more about available office suites for rent in Overland Park!

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Cost-Effective Ways to Increase Employee Comfort at Your Overland Park Office Space

The studies are becoming more and more prominent – cubicles, a longtime favorite office layout, might actually have a negative effect on productivity. While cubicles, especially in an open office plan, put workers and a shared space, they’re not necessarily the best way to promote collaboration. Most businesses don’t have the money to completely overhaul their office space, So here are a few tips for improving employee satisfaction and motivation in cubicles without overspending, as suggested in the article “6 Inexpensive Ways to Help Employees Escape the Cubicle Crush”:

#1 Create Public and Private Spaces

Because cubicles are somewhere in between public and private spaces, it might help people to designate spaces that are clearly collaborative and clearly more private. For collaborative spaces, push together some tables in the middle of an open office space so that people can sit and work together on projects. While not everyone can have a private office, having a few private rooms available where people can spend a few hours or even a day to really get some work done might allow employs to escape cubicle-land if they really need to focus on something.

#2 Encourage Mobility

As long as work gets done, does it really matter where employees do it? Allow employes to leave the premises and work in a coffee shop or library for a few hours, or just head to the cafeteria to escape the office space for a bit. Even consider allowing some flextime for employees to work on a specific project from home, but be sure to set clear goals and timeframes beforehand.

#3 Check the Noise

One of the biggest complaints people have about cubicles is that they can be too noisy – not only in terms of talking, but just general background sounds like phones ringing. Encourage employees to turn their ringers off, consider adding white noise like a fan for a consistent backdrop, or even allow employees to use noise canceling headphones if they have no other escape options.

#4 Monitor Temperature

Something this simple can really affect employees’ workday experience – particularly if they feel like they are freezing every day in the office. Try to keep the temperature at an even 69 degrees to keep people comfortable and productive

It might not be possible to avoid cubicles in your office, but try a few of these inexpensive ways to make your employees workday more comfortable and productive!

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

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5 Tips for a Successful Office Space Lease Term in Overland Park

Sometimes dealing with problems with your landlord during your commercial real estate lease is something you can think about beginning of the lease. Here are a few steps to help you avoid problems during your tenancy, as suggested in the article “6 Steps to Avoid Issues in Your Commercial Lease”:

  1. Clarify the terms. Before you instruct the lawyer to prepare the lease, make sure that the terms are drawn up in a heads of agreement to be signed by both parties. This can help avoid arguments over the actual commercial terms during the execution of the lease and the duration of the term.
  2. Utilize professionals. It is important to make sure that a lawyer is the one who prepares the lease, particularly one with experience in commercial real estate who can help facilitate the deal smoothly. In addition, an experienced property manager can also be an asset in making sure that a property is maintained properly throughout the lease.
  3. Take care of approvals. If you as a tenant are doing any building or improvements, make sure you get the necessary approvals in order before starting – for example, dealing with local councils. Dealing with any regulations beforehand can help avoid problems down the line.
  4. Understand your obligations. Make sure that your lawyer clearly points out your obligations as a tenant, and then communicate clearly with your landlord during the early stages of your lease in order to take care of any duties – for example, the approvals suggested in number three.
  5. Inspections. Inspect the property carefully before the lease begins and note the condition of the space. This will make things easier for both the tenant and landlord at the end of the lease. If possible, take photos to document the condition of the space.

If you’re beginning the negotiation process for your lease, keep these steps in mind to ensure that your tenancy runs smoothly and you maintain a good relationship with your landlord. Dotting your i’s and crossing your t’s early on can help prevent potential problems from even arising in the first place. The key is to make sure that all aspects of the lease are clear and the lines of communication stay open.

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

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The Tenant Benefits of a Renewal Option for an Office Space Lease in Overland Park

Negotiating a renewal option is crucial for a tenant. Landlords benefit very little from these clauses, but for a tenant they can mean leverage in future negotiations and more favorable terms down the line. Here are a few of the benefits of renewal options, as suggested in the article, “Negotiating the Renewal Option”:

  • A good renewal option protects you from circumstances in which other tenants in the property might want your space. You can negotiate to still have first rights to the space even if the other tenant will pay a higher rate or a larger tenant wants to expand into your space.
  • A renewal clause is essential in the event that you have to invest a lot of money in making improvements to space, because a move would result in the loss of that money.
  • A solid renewal cause is a good way to put a cap on the rental rate for another lease term.
  • Your renewal clause can also protect you from unfavorable market conditions in a few years, especially if you have negotiated in detail your renewal rental rate.

Don’t forget about the importance of this renewal option as you negotiate your primary lease. It might seem like thinking too far ahead, but this foresight could save your business a lot of money in a few years.

If your business is interested in Kansas City office space for rent, give a commercial real estate broker in Kansas City a call at 913-685-4100.

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8 Steps To Take Before Signing a Commercial Office Space Lease in Overland Park

Once you have found an ideal location for your office space and you have  settled on a rental rate, there are still a few things you need to consider before actually signing the dotted line.  Here are a few things to add to your checklist, as suggested in the article “What Do I Need to Know Before Signing a Commercial Real Estate Lease”:

  1. Keep negotiating. Lease terms are not set in stone until you actually sign, so continue to try to adjust provisions that are unfavorable to your business. Landlords are often willing to be more flexible than you think.
  2. Read it closely. Though leases don’t make for the most exciting reading and can be very long, it is so important to fully understand what is in your lease. Check and double check the terms to make sure they got everything right—start date, rent, rent increases, and any other important terms.  Make sure you fully understand both your obligations and the landlord’s. Overall, know what you’re getting yourself into!
  3. Settle your business’s legal structure. If you want the protections being incorporated offers, make sure that you have correctly filed your Articles (or Certificates) of Incorporation or Organization.The mailing process from the Secretary of State can take time, so make sure you sort this out well in advance.
  4. Understand the terminology. Do not let yourself be surprised by leasing terms like “CAM,” meaning “Common Area Maintenance” or other basic rental terms. Make sure that the percentage of the CAM you are responsible for is based solely on the size of the building, and not how much of it is actually occupied.
  5. Read the definition of you CAM. This can be a confusing part of the lease, fraught with hidden fees for tenants who do not read carefully.  Make sure that you aren’t paying for anything you shouldn’t have to, such as administration fees over 3%, landlord’s legal fees for other tenant negotiations, build-out costs for other spaces, marketing costs for your landlord, etc.  Try to also ask for a CAM Stop lease, which means that you are only responsible for increases in CAM and taxes above your base year, which can help you avoid hidden fees.  You could instead also ask for a cap on your CAM fees so that they cannot rise above a specific percent.
  6. Understand your capital expenditures. Capital expenditures in the context of commercial leases encompasses the costs of major structural expenses such as repairs of foundations, roofs, or HVAC systems.  The distribution of these costs between landlord and tenant varies from location to location, but try to make sure that the biggest burden of these costs does not get put on you. If you do have to share a certain amount of responsibility for capital expenditures, try to negotiate with your landlord for some sort of cap on the amount you have to spend, or suggest doing regular maintenance a few times a year, but not major repairs.
  7. Prepare for a guaranty. It is very rare to get away with signing a lease without providing some sort of guarantee.  Most landlords will not sign anything without you giving a personal guarantee. But do your best to negotiate and manage the extent of this guaranty. Try to reach an agreement that says you only have to guarantee part of the lease term (i.e.) half, or that a guaranty only lasts a certain amount of months after you terminate your lease, rather than the remainder of the lease period.
  8. Check to see if the lease is assignable. If you ever need to sell your business for some reason, it will probably be important that you still keep the same location, in which case you would need to assign the lease to the business that is the new owner. Try to make sure that your lease doesn’t allow your landlord to terminate the lease in the event of an assignment. Understand though that the landlord will still want the possibility of rejecting the assignment if the new owner is financially unsuitable.

Ultimately, it is important to check the details of your lease and negotiate for what you can, but also be realistic. Your landlord’s willingness to compromise is probably going to be related to the percentage of the property you will be renting—the smaller the property, the less likely the landlord is to deal with nit-picky negotiations. Consider finding a lawyer to help you review your lease and help you decide what is worth pushing for in negotiations. If your business is interested in office rental space in Overland Park, give a commercial real estate broker in Overland Park a call at 913-685-4100!

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Understanding 5 Options for an Office Space Lease in Overland Park

There are several types of commercial leases to be aware of—here are the definitions for five of them, as outlined in the article “Lease Types Defined”:

1.Full Service (FLSV) – A lease in which operating expenses and property taxes are included in the stated rent.

2.Triple Net (NNN) – A lease in which the tenant pays a fixed rent rate, as well as other property lease expenses including taxes, maintenance, insurance, utilities, etc.

3.Full Service Except Janitorial (FLSVEJ or FSEJ) – Similar to a full service lease, except the janitorial services are not included in the rental rate.

4.Gross – A lease in which the listed rent covers taxes and operating expenses.  This is essentially the same as a FLSV lease and the opposite of a NNN lease, and it is the most uncommon type of commercial lease.

5.Modified Gross (Mod Gross) – Somewhere between an NNN and Gross lease—some expenses are included, but things like utilities are most likely the tenant’s responsibility, but even utilities could be combined depending on how things are metered in the building.

If you are looking into commercial leases for your business, it is important to understand what each of these lease types mean and what kind of payment would be most cost efficient for your business.

If you are interested in finding out more about commercial realty in Kansas City, give a commercial real estate broker in Kansas City a call at 913-685-4100!

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5 Tips for Making Good at the End of Your Office Space Lease in Overland Park

If your business is getting ready to move after a long lease term, you are probably starting to think about the make good clause in your lease. Here are a few tips for how to make good as you prepare to move, as suggested in the article “How to: make good at the end of your lease”:

  1. Review the lease agreement. Check the make good clause in your lease. These clauses vary from lease to lease—some are extremely vague, while others have very specific instructions.
  2. Make a list of any changes. List anything in the property that you have changed. The best way to make sure you include everything is to start at the front of your office and walk around it in a clockwise pattern, making note of any changes as you go. Be sure to cover the following common changes:
  • Partitions
  • Painting or other wall decorations
  • Added electrical points or lighting
  • Storage or fittings, including shelves
  • Floating carpet or floorboards
  • Computer areas
  • Heating and cooling
  • Window treatments
  • Signage
  1. Check with the landlord. Once you have taken care of listing everything you have changed, talk to your landlord about what to do regarding the changes. Sometimes landlord will allow changes to remain because they are improvements to the space, but some might require a cash settlement instead of making good. Often this benefits both new and old tenants if the new tenants are planning to remodel anyway.
  2. Redecorate as needed. Particularly if you are a long term tenant, you might be required to repaint the walls white or replace carpets.
  3. Clean up. It is always good to leave your premises in a clean condition. It is a universal practice to do any minor repairs and maintenance to get the place back to it’s original condition, even if these things are not specifically itemized in a lease.

It is equally important to create a clear make good clause upfront, which can benefit both the tenant and the landlord  Sometimes this is impractical if agents really need a tenant to sign a lease and the make good clause is causing problems, since usually new tenants are more concerned about how to make the space their own, rather than with how t get it back to its original condition years down the line. However, it is worth it for both parties to make clear and fair arrangements upfront, then take photos of the space to make it easier to get it back to how it was and avoid any disagreements about the original state of the space.

If your business is looking at commercial MLS listings in Kansas City, give us a call at 913-685-4100 to find more about office lease rates in Overland Park.

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Avoiding Renter’s Regret Over Your Office Space Lease in Overland Park

Small businesses that jump into renting a space without doing the necessary research ahead of time can often end up regretting renting the space they chose—or even renting, period.  Here are a few common regrets to be aware of and avoid when looking for your own office space, as suggested in the article “What Do Small Businesses Regret After Renting Office Space?”:

  • Renting – Sometimes small businesses regret renting at all and wish that they had continued to work at home.  The reason for this is usually that money is too tight and they cannot comfortably afford the space that they lease.  Sometimes it is better to take the time to save a little more before renting, or wait for growth—and certainly to make sure that a space is within your budget.
  • Not Reviewing the Contract – Small business owners often make the mistake of signing a lease without really reading it closely.  Particularly if you are a first time commercial real estate lessee, it is important to have an attorney go over your lease with you to warn you of clauses that could be dangerous—such as a personal guarantee, which could put your home, car, and other personal assets at risk if your business is unable to pay rent.
  • Bad Location – If your business needs foot traffic for sales, it is essential that you choose your location wisely.  Even if you find a beautiful office for a great price, it is not worth your money if it doesn’t have the foot traffic potential that you need.  Avoid this regret by researching the demographics of an area.  Who lives there?  Will they be interested in your product or services?  What is the competition in the area? Do your homework to make sure that you don’t find out the answers to these questions the hard way.
  • Too Much Luxury – It might be tempting to go for a higher priced space in an upscale area or with all of the gadgets and features you want, but be wary of spending too much on flashy luxury elements.  That money could be used for more practical business purposes, such as increased advertising.  You will be in that lease for at least a few years, so be careful not to sacrifice functionality and growth for slick looks.

Be sure to do research before renting a space to avoid regretting it later!

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

 

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4 Things You Should Find Out Before Signing an Office Space Lease in Overland Park

Before you commit to a lease, make sure that you have covered all of the important issues with the leasing agent regarding your rent and any questions that could arise during your tenancy. Here are a few questions to make sure you ask, as suggested in the article “Four Questions to Ask Before Signing a Commercial Lease”:

#1 Does the listed square footage describe usable or rentable square feet?

Note that these two numbers are different: usable square footage is the space that makes up just your office space, whereas rentable square footage also takes into account shared space in the property, such as lobbies, walls, restrooms, etc.

#2 What does rent cover?

Know what kind of lease you are signing—a net lease, gross lease, percentage lease, etc. Leases can be all over a spectrum ranging from everything being included, such as janitorial services and utilities (gross), to you as a tenant being charged for operation expenses (triple-net lease). Know what kind of lease you are getting into so you can evaluate and plan your budget accordingly.

#3 Who pays for maintenance costs?

This is a question you want to have an answer to before anything goes wrong in your space. What is handled by a property’s maintenance staff, and what is handled by you the tenant? Think of things such as leaky roofs, squeaking doors, bad faucets, electrical ballasts, etc.

#4 Does my rent increase each year?

Most leases will stipulate small yearly rent increases, but there are various ways to structure these increases:

  • fixed yearly increases
  • variable increases that take into account changes in property expenses
  • adjustments based on the Cost of Living Adjustment (COLA) for your location, a rate set by the U.S. government

Talk to your agent about how increases for your lease will be determined.

It is important to have a clear answer to all of these questions before signing a commercial real estate lease so that there are no surprise expenses during your tenancy. Do a little research and get some clear answers from a leasing agent before you sign the dotted line.

If your business is interested in commercial space for lease in Overland Park, give a commercial real estate broker in Overland Park a call at 913-685-4100. We can talk to you about rental rates, calculating square footage, property management, and any other questions you may have about renting a space in Overland Park!

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