small office lease in Kansas City

Revisions to Negotiate in Your Small Office Lease in Kansas City

Startups and small businesses negotiating for an office space—maybe for the first time—need to know the places in the lease where they have a little leverage and can negotiate for a better deal. Commercial real estate leases are presented to the tenant in a form that very much favors the landlord, but that doesn’t have to be the final word in negotiations. Small businesses might not have as much leverage as bigger companies, but careful planning and a knowledge of what to push for can lead to successful resolutions. And while research and planning is an important factor, a small business can always benefit from having the assistance of a broker or an attorney in their corner. Here are a few places in a lease where tenants typically find success asking for revisions, as suggested in the article “Small Tenant Lease Negotiating”:

#1 Landlord Consent

Landlord consent may be required of the tenant in two different cases:

Subleasing or Assignment – If a tenant wants to sublease a space or completely assign the lease to a new business, they may be required to get the approval of the landlord for the new tenant. While the tenant might not be able to negotiate for the elimination of this clause, one thing that could help is to require that the landlord must be reasonable in their rejection of a potential new tenant.
Transfers – If a business experiences some sort of change in ownership due to a shift in stock shares or a merger with another company, they may also have to get the consent of the landlord to transfer the rights of the lease to that new party. To have this flexibility, try to negotiate for landlord consent to not be required in the event that the transfer the result of a merger or a business buying the majority of your business’s assets. Often landlords will agree to this as long as the new ownerships has the same financial worth as the original.

#2 Common Area Maintenance Audits

Most standard leases do not contain any mention of an audit if there is a dispute over the common area maintenance rates, but it is common for a tenant to be able to negotiate for this right. Typically this clause stipulates that the two parties will try to resolve the issue within a specified period of time, but if they cannot reach an agreement, a certified third party auditor will be called in to resolve the dispute. It is also possible to specify that the landlord needs to assist with the audit costs in certain cases.

#3 Tenant Alterations

An original lease will often completely prohibit any alterations without the permission of the landlord, but this is typically seen as an extreme restriction—one that would require you to call the landlord every time you hang a picture on the wall. Try to limit this by negotiating for the right to make mall cosmetic changes to the interior of your space, for example painting the walls or changing the carpet. As long as the changes a tenant wants to make are non-structural and not visible from the exterior, most landlords are willing to allow the tenant to make cosmetic changes within a certain budget limit.

#4 Capital Improvements

Some landlords will want to pass the cost of capital improvements—improvements or replacements to the whole building or property—on to the tenant. However, because these alterations will increase the value of the property for the landlord beyond your tenancy, try to negotiate for the landlord to carry the burden of these costs.

The only two exceptions to this rule would be alterations to comply with new laws—but only laws put in place after the you move in, not improvements to correct pre-existing violations—and improvements that will lower the operating expenses of the building. However, you as a tenant should only be responsible for these improvements in proportion to the savings the landlord reasonably believes they will cause.

These are just a few of the possible areas where you might be able to negotiate for some revision in your lease. Be sure to also talk to a broker or an attorney about ways you can negotiate for better occupancy/abandonment requirements, revisions to the mitigating damages clause, and a request to waive punitive damages or claims for profit loss. Commercial leases can be complicated documents, but with the right preparation and support team, even new or small businesses can get a great deal on a perfect space!

Is your business looking for a small office rental space in Kansas City? Give us a call at 913-685-4100 to tell us what you are looking for in a space and find out more about our available affordable office space in Kansas City.

6 Options for Terminating a Small Office Lease in Kansas City

An office space lease can be a big strain on a business during an economic rough patch, and it might be necessary to either terminate a lease or find another way to relinquish a space to save money. Here are a few options for a tenant to consider if a lease becomes too expensive, as outlined in the article “How to Say Goodbye – Exiting Leases”:

Subletting. Rather than simply terminating a lease, a tenant might consider subletting part or all of an office space to reduce the burden of rent. Before subletting, it is important to clearly understand what the lease says about subletting. Often subletting involves getting the approval of the landlord, but be aware that some strict leases allow landlords to reject a subleasing tenant without having to give any reason for their failure to consent. Some landlords might also include a clause in a lease allowing them to recapture a space if a tenant plans to sublet it, even if you only want to sublet a portion of the space. If you are able to sublet, remember that you will most likely still be considered liable for the space, so be careful who you choose to sublet to.
Assignment. Another similar option to subletting is assigning the lease to another business. This sidesteps the issue of terminating the lease, but it also means handing over the entire space and lease to a new tenant. As with subletting, make sure your lease allows it and know that most likely the landlord will most likely have the right to approve or reject the potential assignee. Sometimes leases prohibit assigning or even subletting a space to other tenants on the property, so be aware of who your options are.
Buy-Out. Another option is to buy-out the remainder of the lease obligations, which would make for a more amicable form of lease termination. This possibility is important to address when crafting a lease. When negotiating, the tenant should try to make sure their only obligation is to deliver the leased space “as is” on move-out day. Also, try to negotiate certain releases, such as a release from guarantees. However, releases can be tricky because this might also affect the return of the security deposit or any reconciliations for CAM payments if the tenant overpaid.
Restructuring. Another option less drastic than a buy-out is to talk to your landlord about the possibility of restructuring the lease, possibly to include a shorter lease term.
Defaulting. On the surface, this is the simplest option for a tenant who can no longer afford the lease, but this route is fraught with costs and liabilities, such as losing the security deposit or having to pay other fees. This also is a bad option if you have a substantial personal guarantee included in your lease, or if you have a lot of time left in your lease term and will be required to continue paying rent for a substantial amount of time.
Constructive Eviction. This route is fairly uncommon, but in some cases it is possible to claim constructive eviction to be able to leave the space. In order to invoke this right, a tenant must prove that the landlord somehow interfered with the promised use of the property, depriving the tenant of the enjoyment or beneficial usage of the space. Some examples of actions that could lead to this possibility include a landlord failing to heat a space, provide electricity, or maintain certain things such as elevator functionality or sanitary conditions. In some cases, a tenant might be able to cite the actions of another tenant on the property if they were directly caused or sanctioned by the landlord. In the event that a tenant gets a constructive eviction, they are no longer able to use the premises at all and typically must leave pretty soon after the eviction is granted.

These options are important to be aware of not only if you need to terminate a lease, but also if you are beginning negotiations for a new lease and want to outline your options for exiting.

If you would like some information about office lease rates in Kansas City, give Kathy Woodward a DDI Commercial a call at 913-685-4100.

4 Ways to Improve Your Small Business’s Customer Service At Your Office Space in Overland Park, KS

Small businesses trying to build their reputations really need to develop a strong customer service policy to increase referrals and get positive customer reviews. Here are a few simple tips for improving your communication with customers or clients, as outlined in the article “5 Ways Small Businesses Can Boost Their Customer Service”:

1. Quick Turnaround Time

Nothing demonstrates that you are concerned about your customer our clients’ problems more then a quick response, especially if their issue is time-sensitive. Sometimes you might not be able to solve the problem quickly, but even contacting them to let them know that you are working on it and when you hope to have a solution will most likely make them feel pacified and increase their confidence in you.

2. Take Responsibility

If your business made a mistake or something didn’t come out as you planned, be direct and open with the customer, and work quickly to try and fix your mistake or else offer the client an alternative idea or solution. This seems like an obvious strategy, but many businesses make the mistake of ignoring or deflecting their failings, and they pay for it in a poor customer service reputation.

3. Add A Personal Touch

The benefit of being a small business is that you have a closer relationship with a smaller number of clients. Avoid any sort of customer service scripts, and instead remember your clients’ names, and regularly thank them for their business. When responding to their problems, clearly tell them how you will address the problem, when they can expect the resolution, and how much you value their business, well as what in particular you have enjoyed about working with them. Be sure to end these conversations by checking to make sure that you have addressed all of their possible concerns.

4. Go Above and Beyond

It’s important as a small business to go out of your way to make your clients feel valued and to show that you were working hard for them. Really listen to your clients when they have an issue, and let them know that their problems are a priority by consistently communicating with them to let them know what your plan is and give them regular updates. In addition to dealing with regular problems, try to occasionally do a little extra for clients to make sure that they’re satisfied with what you’re doing.

Focusing on good customer service and communication skills is a great way to begin building your reputation as a small business!

If you are looking for a small office lease in Kansas City, give a commercial real estate broker in Kansas City a call at 913-685-4100 for more information about our available space.

14 Elements of a Small Office Lease in Kansas City

Figuring out how to lease an office space for the first time can be a detailed process, but it does not have to be overwhelming. When you approach an office space lease for the first time, here are a few components of the lease you should be prepared to consider, as outlined in the article, “How To Lease Commercial Real Estate”:

Fees. Most properties will list their costs on a square foot basis either by year or month. However, it is important to know that your usable square footage – the space you will actually conduct business in – is different than the full amount of space you will be charged for. This is because you will also have to pay for usage of common space in a property – this combination of usable space and common areas is called rentable square footage.
Types of Leases. Note that there are different types of commercial leases which will determine exactly what you pay for each month and how responsibilities are divided between you and the landlord. It is important to research which type of lease you have in more detail, but some common types of commercial leases include percentage leases, net leases, and gross leases.
Landlord vs. Tenant Responsibilities. This will be partially determined by what type of lease you have, but it is important to make sure you clarify exactly who is responsible for what, including maintenance and repairs of HVAC units or other major appliances.
Lease Term. This is an element of a lease in which landlords and tenants are often at odds. Tenants typically prefer shorter term leases so that they are not stuck in a space, but also with plenty of options to renew or expand in case they do want to stay and maybe add on a nearby space. But on the other hand, landlords prefer longer leases so that they do not have to replace tenants every few years. This means that if you are planning on a long term lease, you might have a little negotiation leverage with a landlord.
Build Outs. If you need to somehow alter or renovate a space, this needs to be clearly negotiated upfront. Determine what changes you are allowed to make and who will finance these changes. Again, if you have a longer lease term, a landlord might be willing to contribute more to the cost of building out a space.
Rent Increases. Landlords typically plan rent increases around the consumer price index. Increases are known as “escalations” and you should be fully aware of what these entail before signing your lease.
Personal Guarantee. This is not a pleasant part of the lease for a tenant, but you will most likely have to sign a personal guarantee to lease the space, which holds you personally responsible for rent if your business is not able to pay. Landlords also like to do background checks on your personal finances to determine whether you will be good for the money. These typically are most important at the beginning of a lease, and you might be able to negotiate to have your personal guarantee expire after part of your lease.
Exit Clause. If you do get in a situation where you need to terminate your lease, you will want to make sure you have determined a plan for this upfront, which means trying to negotiate for smaller termination penalties, for example, only a few more months of rent payments.
Subleasing. It is always a good idea to try to negotiate for the option to sublease your space, which can really help your business if you need to move to another space or if you cannot pay rent.
Assigning the Space. A more extreme option than subleasing is assigning a space to a new tenant altogether in the event that you need to move out. Some landlords do not allow this, but it is good to ask about in negotiations.
Exclusivity Clause. If a big part of your customer base is foot traffic, you might want to try to negotiate for an exclusivity clause, which means that a landlord cannot lease nearby spaces to your competitors.
Co-Tenancy Clause. Some properties have anchor tenants, which bring in a lot of foot traffic and can be a major selling point for smaller tenants to rent nearby spaces. If you know you are going to be dependent one of these anchor tenants to increase your business, try to negotiate for a co-tenancy clause which allows you to break your lease without penalty if the anchor tenant leaves.
Start Date. It is important to make sure that your business is fully prepared to take on the responsibilities of the lease by the start date, which might mean that you need to ask for a start date that is different from when you sign the lease.
Security Deposit. What a landlord asks for this can vary greatly from space to space, so it is important to be ready to negotiate this point.

Consider these factors as you search for an office space!

If you are interested in office space in Kansas, give a commercial real estate broker in Kansas City a call at 913-685-4100 to learn more about our available spaces!

4 Things a Startup Should Consider When Renting a Kansas City Office Space

Selecting an office space is a monumental task for any company, but it is particularly challenging for young companies doing it for the first time. While landlords typically want a tenant to stay for 5 to 7 years, this is often not ideal for new, growing companies who don’t really have an idea of where their business will be in the near future. While this can be a bit of a pickle for startups or growing companies, the key to finding a suitable office space is thinking about the specific needs of your business. Here are a few things to consider when searching for an office space, as suggested in the article “Choosing the Best Office Space for Your Startup”:

#1 Layout

To figure out what kind of layout your business needs, think about what kind of company you are. For example, if your work is based in creativity or even technology, you might want to follow the open office space trend to foster an environment of collaboration and idea sharing. However, if you are a law firm, you might want something with more private spaces so clients can feel that they can discuss sensitive issues in a more one-on-one environment. If you think your company could benefit from contact with similar businesses, look into options that allow you to share kitchen space or conference room with other tenants. This might give you an opportunity to meet and work with other small businesses that complement yours.

#2 Special Features

Make sure that an office space has all of the amenities that your business requires. A good way to approach this is to think of things to your business absolutely needs and things that you would ideally like to have. Think about not only features within the space, such as the kitchen or conference rooms, but also things like the parking spaces or restaurants and other amenities services in the area that your employees might need.

#3 Lease Length

New startup companies typically want to aim for leases that are on the shorter side. You might only have a handful of employees now, but that number could grow and a matter of months. Keep an eye on your long-term business plan as you look at spaces, and try not to get locked into something that could stifle your growth. Talk to landlords about your options if your company grows, such as subleasing space or having the potential to expand into other space on the property.

#4 Cost

This obviously needs to be a bottom line in your decision. While businesses often calculate costs according to the price of the space per employee, it might be helpful for new business to think about how much you can actually spend per month total for your team. Don’t forget to factor in things like utilities, furniture, and other hidden fees, as these things can quickly increase the total cost of the space. Remember that a lot of these things will differ depending on the location where you are looking. It is important to give yourself several months to research and plan a transition before actually moving.

If you are a small business looking for your first office space, is important to have a good idea of what you want before you begin the negotiations. Often this is the kind of decision that can make or break a business, so make sure to consider it from every angle before investing in a rental space.

Are you an entrepreneur looking for a small office lease in Kansas City? Give a commercial real estate broker in Kansas City a call at 913-685-4100 for more information about our available office spaces.

3 Essential Things You Need When Renting Your First Office Space in Kansas City

Regardless of what kind of space you’re looking for, if you want to rent an office space for the first time there are a few things to keep in mind, starting with the fact that the landlord is renting out the space for the purpose of making money. This means that you as a potential tenant need to both convince them that you’re a reliable business to lease to and also look after your own interests during negotiations. Be ready to answer the landlord’s tough questions and prepare yourself for the whole process by considering a the following factors, as suggested in the article “Steps to Secure Your First Commercial Space”:

#1 A Business Plan

Having a solid business plan to show a landlord is especially important for new companies who can’t provide a history of financial statements to show their credit worthiness. Think of showing a business plan to landlord as similar to pitching your company to investors. A landlord is also taking a risk and making an investment in the success of your business, so it is important to give them a clear, realistic, but hopefully positive outline of where your business is headed. If your company is simply relocating, try to supply the landlord with information about your rental history and previous budget plans to show that you are a financially stable tenant.

#2 An Agent

While it is possible to rent a space without an agent, an agent can be extremely helpful, particularly for new businesses who don’t have a lot of experience with the commercial real estate market. It is important to select an agent who will work with you throughout the entire process and who is representing only your interest and not acting as an agent for both you and the landlord. Remember that the listing agent named on the property’s advertisement was hired to work for the best interests of the landlord. One advantage of working with an agent is that they know the markets and can give you an idea of fair rental rate in that area. They can also help you during negotiations, which could save your company a significant amount of money in the long run, and they are also familiar with the language of leases, so they understand what will benefit or potentially hurt your company. If the landlord pays for your agent, as is almost always the case, there is very little downside to working with an agent.

#3 An Exit Strategy

Although it’s not the most pleasant thing to think about, just as you have an exit strategy for your business you should also have an exit strategy for your lease that is factored into your lease negotiations. If you’re working with a good agent, they should be able to help you negotiate for certain provisions that will make it easier to get out of the lease if absolutely necessary. Some of these provisions include a sublease or assignment clause, or an early termination clause. This aspect of renting a space can be difficult to navigate and absolutely must be taken care of before signing the lease, so strongly consider consulting with an agent as you form your exit plan.

A favorable lease is so important, particularly for small businesses just starting out in their first rental space. If you don’t have a lot of experience with the commercial real estate market, it is important to prepare yourself for negotiations by having a business plan and exit strategy ready, preferably with help from an agent.

If your business is considering a small office lease in Kansas City, give us a call at 913-685-4100 to learn more about our affordable office space in Kansas City.

Messages Color Can Send About Your Office Space in Kansas City

The idea that color can have a positive effect on mood is not a new concept. Here are a few ways that the colors and hues of your office can send positive messages, as suggested in the article “Transform Your Workspace With Color”:

Fiery Colors

Using small amounts of warm, bright colors such as red or orange can energize a space. These colors are great for areas where employees are not actually working, such as hallways, kitchen spaces, or bathrooms. A small amount of red can raise the heart rate, but too much can promote stress and aggression.

Cool Colors

Cool colors such as blue and green–ones often found in nature–have been proven to be calming. Pastels, such as lilac, can have a similar effect.They can transport people from a cramped, fluorescent workspace to a more natural environment and corresponding mood. One great way to achieve this effect is by adding plants to your office.

Yellow

Yellow and other brights accents promote happiness and self-esteem. These colors are best on furniture, accent walls or other decor, because an overwhelming amount of yellow can be agitating.

If you are thinking about painting your office space, consider these ways to use color to boost the mood in your workplace!

If your business is interested in a small office lease in Kansas City, give a commercial real estate broker in Kansas City a call 913-685-4100 to set up a tour of one of our spaces!

3 Indicators That Your Business Needs to Move Out of the Home and Into an Office Rental Space in Kansas City

Moving from the home office to a real office space is a big but positive transition for small business. Consider these three indicators that your small business might be ready to relocate, as outlined in the article “When is it time to move out of the home office?”

#1 You can no longer tell work from home.

Has your office clutter started to take over your entire house? It might be time to move on, even if it is just finding a storage facility or outsourcing your mail. But these could also be indicators that your business is growing and needs more space. You might also find that at the same time your work is literally invading your home life, it might also be invading the mentality of being home. If the lines are becoming blurred between work time and home time, it might do you and your family some good to find a new physical space for your work. On the flip-side, home might be affecting work in the form of distractions. You might find yourself more productive in an office space. The initial expense of the space might be a worthwhile investment for your increase in productivity.

#2 You need to have serious client meetings.

While some businesses thrive in a casual home environment, such as daycares, tutoring or even home spas, it can seem unprofessional for other types of businesses to meet with clients in a home, especially if your home is located far from the business center of the city.

#3 You can’t do it all by yourself any more.

It might be possible to hire a few staff members at home, but things can become crowded quickly when a home becomes an office space and not just a family based business. Consider whether you’re ready to share your kitchen and bathrooms, or what will happen if your kids need to stay home from school. The need to hire staff can be a good sign for a business, so if you expect this growth to continue and doyou think you can budget for a space, it might be a good time to move.

There our variety of office space options available to small business owners, so take your time and look for one that makes the most financial and business sense for you.

If you’re looking for a small office lease in Kansas City, give Kathy Woodward at DDI Commercial a call at 913-685-4100 find out about our available office space.

3 Important Parts of a Small Office Lease in Kansas City

The goal of every tenant looking for commercial real estate is to find the best space for the least amount of money. Tenants look for something that will meet all of their needs, but will also fit in their budget. In order to achieve this aim, potential tenants need to understand what drives the cost of commercial space and how to deal with each of those costs. Here are the three most important factors that affect the cost of an office space, as suggested in the article “3 Tricky Things in an Office Space Lease”:

Location
The layout of an office space
The structure of the lease and negotiations

Understanding the relationship between these three things is the best way to effectively plan for acquiring an office space lease. Most failures to get a good space are usually the result of not dealing with one of these factors properly. There are so many hidden items in leases that if not handled correctly can really add to the cost and office space. One of the best ways to minimize these these costs and improve your chances of negotiating a good lease is to seek the expertise of a professional during the leasing negotiations – someone who can explain the nuances of each of these major factors.

If you are just beginning the process of leasing your first office space, consider these three factors and talk to an attorney or agent about what you want!

Give a commercial real estate broker in Kansas City a call at 913-685-4100 if your business is interested in office suites for rent in Kansas City.

6 Tips for Startups Trying To Negotiate a Favorable Small Office Lease in Kansas City

Startups don’t always have the most clout when trying to negotiate a commercial real estate rental with landlords. But it is not impossible for a startup to end up with good terms for their first commercial lease, particularly with real estate markets reviving in some parts of the country. Here are a few tips for negotiating for a favorable lease, as suggested in the article “How Startups Negotiate Favorable Leases”:

#1 Work With a Broker Small businesses—especially startups—can benefit hugely from working with a lawyer who is familiar with the industry and the area. Talk to other tenants in the building about the brokers they used, and try for someone who has experience with that building, or even just with the neighborhood. Commercial markets can be very specialized, so it is important to not only have representation, but to have representation that knows the context. Be particularly wary of seeking help from the landlord’s broker, who will be prioritizing the interests of the landlord.

#2 Evaluate the Location Consider the positives and negatives of a location. Remember that while a flashy location might be important for some types of businesses, that kind off luxury will also come with higher business license fees and taxes. Also consider things like parking for clients and building access for deliveries.

#3 Know What is Included in Your Rent Depending on the type of lease, your rent might not include everything–for example, you might have to pay separately for utilities, janitorial services parking, property taxes, maintenance of common areas, or insurance. All leases vary and are negotiable, so try to make sure that the terms in your lease match the particular needs and budget of your business.

#4 Ask for Concessions from Your Landlord Because the real estate market has been in such a slump, landlords have been offering a lot of great deals to tenants. But as markets in many areas start to improve again, these deals may get less and less frequent. Usually sweeteners are offered to long term tenants, so if it is possible, try to get a good deal on a long term lease while you can—but know that shorter leases are generally better for smaller companies because there is less financial risk involved.

#5 Include a Termination Agreement Give yourself an escape hatch both for the possibility that your business is hugely successful or struggling. Whether you have outgrown your space or you are having difficulty paying rent each month, a termination agreement can facilitate a much needed way out. Some landlords will want to be able to approve of a transfer of ownership of your business or ask for a personal guarantee, especially if you are a startup. Make sure that these terms are clear and try to negotiate to make them as favorable as possible. Best case scenario, you do not need a landlord’s permission to transfer a lease, which will allow you to make a deal if need be without worrying about pleasing your landlord.

#6 Try to Get a Cap Fees that increase annually can become a major burden for businesses in long term leases. Try to negotiate for a cap on management and operating fees based on a percentage of your rent. Caps like these can be difficult to get, especially in thriving markets, but they are still worth trying for.

While startups are not in the best position to negotiate great leases, it is still possible to come out with something favorable for your business with a little negotiation smarts.

If your business is looking for office space for rent in Kansas City, give Kathy Woodward at DDI Commercial a call at 913-685-4100!