Commercial Leasing - What you need to know

Growing a business is exciting – especially when it’s time to move into a new space.  But get caught up in the excitement and you risk overlooking important details.

I’ve been in this business a long time and I’ve helped out many clients who, when working with other realtors, forgot to ask the important questions before signing a lease or purchase contract. To save you this trouble, I thought I’d outline a few of those important questions for you.

Important considerations before you sign the contract:

1. Automatic lease renewal: Many clients think they’re getting into a lease with automatic renewal only to discover this isn’t the case when they receive notice from their landlord. It’s important to check the fine print of your lease to make sure you can stay as long as your business requires you to.
2. Fire retro fits: Older buildings, particularly multi-unit residential buildings, often require fire retrofitting to conform to zoning regulations. Before investing, make sure the building has a contingency fund large enough to cover the retrofit or that you have room to raise rents enough to cover the cost.
3. Negotiate a tenant improvement allowance: Many landlords are open to negotiating an improvement allowance (for example $15 per square foot is a reasonable amount in many areas of Toronto). It’s important to remember that these improvements must conform to the landlord’s expectations and can’t affect the building’s electrical or structural integrity.
4. Due Diligence: Protecting yourself means crossing your ‘T’s and dotting your ‘I’s. That’s why it’s important to have access to professionals. Work with a realtor who has a strong rolodex of lawyers, inspectors, facilities managers and environmental consultants, to name a few.

The easiest way to get around these issues (and countless more) is to work with an experienced professional who will guide you through the process. I encourage you to view  your realtor as a partner who can help you grow your business while keeping your sanity.