office space lease Overland Park | Southcreek

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

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

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

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

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

Red Flags for an Office Space Lease in Overland Park: Part III

If you are not completely sure of what every term in your lease means, you still have more work to do before you sign. It is important to understand what you are getting yourself into, because misunderstandings in your lease could prove costly to your business down the road. Research or seek clarification from an attorney if you have questions about what some of the terms in your lease mean. Here are a few final leasing “red flags” —bad news leasing terms that you should be watching out for:

Triple Net Leases – In a Triple Net Lease, a tenant is required not only to pay for rent, but also for the landlord’s taxes, insurance, and maintenance fees. Triple Net Leases always favor the landlord.
Vague or Unrestricted Fees: Sometimes landlords might try to make tenants responsible for the direct expenses of large common area maintenance (CAM) and repairs. It might be wise to make sure that any CAM fees you need to pay are specifically addressed in your lease. Tenants should not have to pay “unanticipated” increases in expenses or “occasional” expenses, such as major renovations or repairs (i.e. a collapsed roof), a landlord’s unexpected tax bill, landlord or property management staff salaries, or contractor fees.

Knowing what kind of problem terms to look for in a lease is a good step towards ensuring that your business will not run into any lease issues during the duration of your time in a space.

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

10 Things To Do Before Signing a Small Office Lease in Kansas City: Part II

Before you sign your final lease, make sure you take the time to go over a few things that could save your business money and hassle in the long run:

5.   Think about asking for a CAM Stop lease. A CAM Stop lease means you will only pay for increases in CAM and property taxes after you base year (initial lease year). Even though the landlord might increase your base rent, this provision will eliminate some of the “mystery fees” from your rent. You could also ask for a cap on the CAM so that it will only increase by a certain percent that you have already negotiated.
6.   Read the CAM definition. This is one of the most confusing parts of the lease, and you will want to make sure you aren’t paying for things that are not your responsibility. Things to look out for include things related to the landlords marketing efforts, legal fees for negotiating other leases, administration fees over 3%, benefits for the landlord’s employees, and any build-out expenses for other spaces.
7.   Understand your capital expenditures responsibilities. “Capital Expenditures” in a commercial lease usually includes expenditures for major repairs/replacements (roof, foundation, HVAC, etc.). The standard for capital expenditures varies from state to state, but you will want to do your best not to have to bear the full burden of these costs. Perhaps talk to your landlord about limiting your obligation to regular maintenance or general repairs only up to a certain annual amount.

It is important to look out for these and other issues before you sign your office space lease in Overland Park.

Give us a call at 913-685-4100 to start talking about leasing an affordable office space in Overland Park!

Checklist for Leasing Overland Park Office Space Part II

Here are some more suggestions for a checklist your business might consider making before leasing a new office space:

5.   Handicapped Accessibility: Is the space wheel-chair accessible with a reasonable amount of handicapped parking? Legally, buildings have to have designated handicapped parking, so if you do not see any, ask the landlord why not, and if they are planning to add spaces. A landlord could try to pass the cost of these kinds of additions and renovations onto their tenants.
6.   Safety and Insurance: You will need general commercial liability insurance to move into most leased commercial spaces. If you cannot get insurance after signing a lease, you might find yourself still stuck paying for that lease anyway. Some specific safety questions you should ask include whether the area is safe and secure, whether it has ample and working nighttime lighting, are there alarm services or onsite guards, are there nearby police or fire departments, the location of the nearest fire hydrant, and whether there are smoke detectors and sprinklers in the building. Concerns like these affect the safety of you and your customers as well as your ability to get insurance and the rates and coverage of that insurance.
7.   Restrictions on Business Use: Are there any restrictions on the type of retail business you can run, the hours or days of your business operation, or how many customers you can have per day?

Think about what will best help your business succeed and grow, and make your own checklist to aid your search for Kansas City office space for lease.

If you are interested in finding an office space lease in Overland Park, give us a call at 913-685-4100!

Renewal Leases for Executive Office Rental in Overland Park

Renewal clauses are an important part of lease negotiation, but you may not know what exactly these clauses involve or how your landlord might be approaching them. Here is a little information that might help you better understand negotiating renewal clauses for your office space lease in Overland Park:

What your landlord is thinking:
Usually landlords and leasing agents want you to sign a long-term lease—one that extends over several years. This guarantees them a flow of consistant income and means that they do not have to go through the hassle and financial stress of having to re-lease the space every few years.

Renewal clauses:
A long term least might not be the best option for your business if you are growing and do not want to get stuck in a five or 10 year lease. Your best bet might be to consider a short-term lease with option to renew. A renewal clause in a lease gives you the power to decide once your initial lease term expires whether you want to extend the lease or not. For instance, instead of signing a fixed 10-year lease, you could negotiate for a two-year lease with four two-year renewal options.

How to negotiate renewal options:
The ideal renewal situation is negotiating a series of predetermined raises in rent for each new renewal term. If you do not settle on predetermined increases, your landlord could raise your rent in accordance with fair-market rates, which could mean some potentially large and unforeseen rent increases—in particular if your business is renting in an area where commercial office space is in high demand.

Understanding how the length of a lease could affect your business and your landlord’s agenda when dealing with lease lengths can help you be prepared to negotiate the best lease and renewal options for your business!

Want to discuss the lengths of leases for a Southcreek Office Park space? Give a DDI commercial real estate broker in Overland Park a call at 913-685-4100!

10 Commercial Real Estate Kansas City Loan Mistakes Part II

If your business needs a loan to help cover the cost of your office space lease in Overland Park, you will want to avoid some of these common mistakes that businesses make when applying for commercial real estate loans:

Failing to review your balance sheet. Before you take out a loan, be sure to review your balance sheet and analyze your liabilities and cash flow to confirm that you will still have enough funds to run your property properly while you are paying off the loan.
Not negotiating the best deal. In order to make sure that your business gets the best deal, you will want to make sure that you have a competent real estate attorney to help you with the fine print of a commercial real estate loan offer.
Opting for a familiar lender. While it is good to establish a rapport with a lender, especially when you need a loan, you should first check out some of the other possibilities, since new real estate products are constantly being offered.
Not looking into an SBA loan. It might be a good idea to first check with the Small Business Administration to see if they can help you obtain any loans or find out what advice they might have to offer.
Not being organized. Make sure that you have ready any necessary documents that a lender will expect to see, and be ready to show why the rental of the property makes fiscal sense.

Doing your homework before applying for a loan could save you from pitfalls like these!

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

Tips: Signing an Office Space Lease in Overland Park

Signing a lease for office space in Kansas City is an important step for your business not only because it determines the physical space in which you will be conducting business, but also because it can affect your business’s ability to grow and evolve. With that in mind, think about a few tips as you begin the lease negotiation process:

Negotiate a Lease Best Suited to Your Business
Before you even begin negotiating, brainstorm a list of terms that would be beneficial to your business. For instance, if you are opening a certain type of store in a mall or some other retail setting, you might want to stipulate that no other store like yours can rent space in that area for the duration of your lease. If you are expecting walk-in business, be sure to negotiate for terms that will let you put up any necessary signage.

Sign the Right Lease for Your Needs
The benefit of a shorter-term lease is the option to leave the location early if you are not pleased with it. While a longer-term lease offers stability and can keep increases in rent down, a longer lease ties you to a location that might be too small or unprofitable for your business down the road. Usually there are ways to get out of any kind of lease, but you do not want to go into an agreement thinking about ways to get out.

A savvy lessee could potentially save their business money and create opportunities for business growth and development!

If you would like to learn more about Overland Park office space for lease, give one of our commercial realtors a call at 913-685-4100!