Today’s theme — get it in writing. During my years as a commercial real estate broker, I have learned many lessons from the School of Hard Knocks. The most important is ALWAYS get commitments in writing.
This is particularly true when negotiating your office lease.
From the onset, have the leasing agent put your business terms in a written proposal. The rent (including annual escalations and operating expenses), the lease term, the tenant improvements (construction), parking and business hours are just a few points to be covered in a good proposal. Getting a written proposal is a necessity because it catches misunderstandings and surprises early in the process. The written proposal also becomes a checklist of business terms to use when reviewing the actual lease document.
Once you have a written proposal, you can then negotiate the terms and ask questions with a greater understanding of the entire transaction.
Several years ago, I negotiated a lease for a company moving into Miami. The landlord’s proposal clearly stated that the free rent concession included both the base rent and operating expenses. The tenant’s headquarters reviewed and signed the lease quickly without realizing that the free rent in the lease was only for the base rent. When I returned from vacation and reviewed the fully executed lease, I saw the mistake. By using the written proposals as evidence, we were able to correct the oversight with a lease amendment. This saved my client thousands of dollars.
When it comes to the lease document, do not assume anything. Get it in writing. The landlord’s leasing agent promises that extra parking is not a problem? Fine, let’s put it in the lease. You are told that four extra electrical outlets won’t cost you a penny. Great, let’s add it to the lease.
Remember, the leasing agent only makes money when you sign a lease. Some get so excited about the deal, they say, “Yes, yes, yes” and then the lease (and the property manager) says “No, no, no”. Sometimes it is not even the leasing agent’s fault. I have had several occasions when the client/tenant hears what they want to hear and not what was being said. So make sure that from the very beginning you get everything in writing and avoid ugly surprises.
If you want guidance during the process of renewing your lease or finding a new office, contact me. Typically my fees are paid for by the landlord and my services cost you nothing.