You may have noticed that renting commercial real estate at the right price can be a pretty frustrating ordeal. There are a bunch of reasons why this is case; way too many to go over in 30 seconds. But here are some of the that may be things that you may be running into:
1) The CRE market is on fire
No, not the buildings themselves, but the market as a whole is super competitive. Many cities are seeing the lowest vacancies in 8 years with respect to renting commercial real estate. Lower vacancy rates mean higher rents. It’s just a supply and demand issue.
Pro Tip: If you see a place that you like at market prices, don’t hesitate to make an offer. Today’s market prices will most likely be a steal a year from now.
2) Landlords need to love you too
Sure you want to find an industrial, office, or retail space that you and your company love, but it’s a 2-way street. Empty space is expensive for landlords, and they are looking for stable tenants that are going to stick around for a while. Landlords are not interested in renting commercial real estate to folks that don’t have staying power.
Pro Tip: Have your tax returns, bank statements, and other financial docs ready for a landlord to review. Having this info ready is a great way to secure a space over another business.
3) Don’t be afraid to commit
Landlords get it. They know that running a business can be uncertain and that putting yourself on the hook to rent a commercial space for 2 or 3 years can cause anxiety. Most landlords require 24 month minimum leases on industrial & office space, and 36 months minimum for retail space.
Pro Tip: Even hinting that you’d like less than a 24 or 36 month lease term can cause you to get shunned by a landlord or their agent. Your business will seem like a gamble, and that’s not what they want. If you like it, put a ring on it.
4) Get Creative
Signing on the dotted line for 2 or more years is just not an option for some businesses. Don’t fret. Look into executive suites and co-working spaces. These places cost more per square foot, but don’t require a commitment. Alternatively, consider staying in your current space until your business is solid enough to truly need long-term commercial space.
Pro Tip: If you need a space that’s flexible, you’ll need to talk to landlords and other tenants to sublet directly. Knock on doors. Buildings may have extra space, and if you ask you may get lucky. After all, you don’t ask, you don’t get.
5) Be forthcoming and honest
Be forthcoming and honest. That’s good advice in all things, but particularly with renting commercial real estate. Landlords have other tenants that they need to keep happy and they have an image that they want their space to maintain.
Pro Tip: Parking, noise, competing businesses, and how your business and customers look and act are all factors in the landlord’s decision. Put your best foot forward, and don’t try and BS them. Trust me, they’ve seen it all before and can tell when things don’t add up.
6) The CRE business is old school
As we’ve been alluding to this throughout this, renting commercial real estate is much more like a relationship than a transaction. It’s not uncommon for a landlord to want to meet you face-to-face to sign documents in person (after their agent vouches for you). They’ll be sizing you up – sell them on you.
Pro Tip: Landlords and their agents are people. Be friendly, look for win-wins, embrace give-before-you-get, and you’ll be much more likely to get the space you want. Plus, any issues that may come up during the process or after you move in will that much easier to work out.
7) Expert Help is free
Most landlords don’t handle the day to day of getting their units rented. Instead they rely on listing agent to handle that for them. Listing agents work for the landlord and are pros at serving the landlord’s interests and get paid on commission.
Pro Tip: Even the playing field and make less work for yourself by getting a Digsy Expert or a Tenant Representative Agent to represent you. The landlord pays Digsy Experts for finding them a tenant – you don’t pay a thing.