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Leasing Tips For Tenants

Take a careful assessment of your current and future needs and requirements.

  1. What size space will you need for the next 2-3 years?
  2. What size space will you need in future years?
  3. Will the property you are considering leasing allow you to expand?
  4. What is your budget for occupancy costs?
  5. Do you have special requirements like 3-phase power, Internet speed, loading docks, ceiling height, LEED, solar, location, exposure, access, or visibility?
  6. Prepare a financial statement and have at least two years tax returns available for Landlord review. Typically, the stronger you look the more negotiating room you can have.
  7. Consider the likes and dislikes of the space you are currently leasing.
  8. When do you need to move?
  9. Will you be making improvements that require governmental permits?
  10. If improvements are to be made are you planning to pay for them or are you asking the Landlord to contribute towards the cost?
  11. Do you have a general budget (time and financial) for your projected improvements?
  12. Do you have an experienced leasing broker assisting you? They can help you with market data, advice, and help negotiate the lease terms. A good broker is important.

Have you considered purchase instead of lease?

Many times we’ve completed a Lease vs. Buy analysis to compare the occupancy costs of leasing to the occupancy costs and tax benefits of buying. About 50% of the time it makes financial sense to buy mathematically. If you’re planning to stay at a location for a long term and the numbers work buying can be a good choice. With 90% loan to value and a long-term, fixed rate loan with currently low interest rates it can make a lot of sense.

Another benefit of buying a property for your business is when its time to retire. You can sell your business then lease the location back to the purchaser of your business. This can add significant value when you sell the business. This is very effective for dental and medical practices and other long-term businesses.

We can complete a Lease vs. Buy analysis for you so you can review the numbers.

Dale Dockins, CCIM
(707) 521-3500 x302

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