Are you looking to lease a commercial space for your business? There are several factors to condisider when trying to find the right place... that is, afterall, why they say: Location. Location. Location!
The first thing to do is to find the right part of town to locate your business. Is Uptown Charlotte your best bet, or is suburb Fort Mill, SC more your speed? Do you need a stand-alone office, or a high-traffic retail spot. Identifying who your clientele is, and where they are will help you choose the right types of locations.
Once you have narrowed it down to a genre of locales, you can start looking at specifics and what is available. Check out thet Kuester site for available properties in your area. Here are some other factors to consider:
1) Are there other businesses in the immediate area that would compete with you?
2) Are there businesses in the immediate area that complement your business? (i.e. a restaurant and an ice cream shop).
3) Is there enough parking for your customers/clients?
4) Does the area have foot traffic?
5) Is the location near a major roadway?
6) What is the rent price?
7) Is there area growing or established?
8) What kind of upfits will you need to have done?
9) When will the space be available
10) What are the contract terms?
If you are interested in learning more about the available properties that Kuester has to offer, just check out our website at www.kuester.com.
Showing posts with label commercial lease. Show all posts
Showing posts with label commercial lease. Show all posts
Sunday, July 25, 2010
Sunday, June 28, 2009
Property Management: What Services to Expect
A property management company will offer services that can vary depending on the company, the type of property and your specific needs. When deciding which company with which to work, ask the property management company what services it will provide you. Once you make your decision, you should confirm that you have the an agreement on the terms in the lease. The lease agreement should be comprehensive and outline the services and what the services will cost.
Here are some of the services commercial property management firms will typically provide:
Finances & Bookkeeping. Financial record keeping and reporting are integral services provided by your property management firm.
Strategy. A commercial management company can develop a marketing strategy and analyze the current business conditions in your area, and for your property.
Budgeting & Forecasting. The property management firm develops and monitors the property's budget, including the maintenance, marketing, personnel to operations.
Maintenance. Commercial property management companies provide monthly maintenance, and preventative maintenance programs.
Marketing Programs. Firms can develop and implement marketing programs including such marketing materials as brochures, advertisements, events, property newsletters, and signs.
Market Rent Analysis. Management firms will provide an analysis of market rents and those of the competition, changes in area demographics, and anticipated absorption levels.
Rent Collection. The property management company will handle the collection of rent.
Lease Negotiation. The commercial property management company will negotiate tenant leases and renewals.
Tenant Liaison. The professional property management firm acts as a liaison to the tenants, responding to tenants' needs and addressing concerns immediately.
Upgrade and Build-Outs. Commercial property managers handle and supervise all contracted work (such as tenant build-outs).
Compliance. Commercial management companies maintain documented procedures to ensure compliance with all federal, state, county, and local governmental regulations, ordinances, and fire, health, and safety codes.
Here are some of the services commercial property management firms will typically provide:
Finances & Bookkeeping. Financial record keeping and reporting are integral services provided by your property management firm.
Strategy. A commercial management company can develop a marketing strategy and analyze the current business conditions in your area, and for your property.
Budgeting & Forecasting. The property management firm develops and monitors the property's budget, including the maintenance, marketing, personnel to operations.
Maintenance. Commercial property management companies provide monthly maintenance, and preventative maintenance programs.
Marketing Programs. Firms can develop and implement marketing programs including such marketing materials as brochures, advertisements, events, property newsletters, and signs.
Market Rent Analysis. Management firms will provide an analysis of market rents and those of the competition, changes in area demographics, and anticipated absorption levels.
Rent Collection. The property management company will handle the collection of rent.
Lease Negotiation. The commercial property management company will negotiate tenant leases and renewals.
Tenant Liaison. The professional property management firm acts as a liaison to the tenants, responding to tenants' needs and addressing concerns immediately.
Upgrade and Build-Outs. Commercial property managers handle and supervise all contracted work (such as tenant build-outs).
Compliance. Commercial management companies maintain documented procedures to ensure compliance with all federal, state, county, and local governmental regulations, ordinances, and fire, health, and safety codes.
Tuesday, June 2, 2009
Tips for Negotiating a Commercial Real Estate Lease
Dear Property Manager,
My husband and I are considering buying a franchise. We have both owned small businesses before, but we do not know anything about negotiating a commercial lease, what we can ask for, what is included, what are our responsibilities, etc. Can you give us a few pointers on commercial property leases?
Mary K.
Fort Mill, SC
Dear Mary K.
Depending on the type of franchise, the area director for that company may very well be able to assist you in finding a negotiating the commercial lease. Commercial tenants almost always look to their landlords to provide them more than just the right to occupy space. Landlords, (and/or the property management companies) frequently provide a number of services. The landlord may "build out" the leased space for the tenant's specific use--creating the look and feel you want and the functionality you need to run your business.
Commercial property owners will also probably provide heating and air conditioning, cleaning, utilities, and telephone and Internet services. Maintenance and repair of the leased property and the surrounding premises including the parking lots and common areas are also generally the landlord's responsibility. This includes the parking lot, pothole repair, lawn and landscape, elevators and security. These are all things that should be clearly spelled out in your lease agreement.
Now, your responsibilities is probably no more than keeping the space well maintained and paying for use of the leased space and the bundled services--and doing so on time!
To have some assurance that a tenant gets what it was told it would get and what it is paying for, every commercial lease should at least:
State in detail landlord's responsibilities to tenant. Things like when the heating and air conditioning will be on and how the property will be kept secure.
Describe what happens if the contract is broken. The lease should define what constitutes a default by the landlord and/or the tenant, as well as provide a method for a quick, inexpensive and final resolution to any disputes.
The best advice is to read the lease thoroughly and go over it with your real estate attorney. A tenant should be sure that these issues are addressed in a proposed lease to avoid any future questions or disputes.
Best of luck, and please contact Kuester if you would like to know what properties may be available in the Fort Mill area.
Property Manager
www.kuester.com
My husband and I are considering buying a franchise. We have both owned small businesses before, but we do not know anything about negotiating a commercial lease, what we can ask for, what is included, what are our responsibilities, etc. Can you give us a few pointers on commercial property leases?
Mary K.
Fort Mill, SC
Dear Mary K.
Depending on the type of franchise, the area director for that company may very well be able to assist you in finding a negotiating the commercial lease. Commercial tenants almost always look to their landlords to provide them more than just the right to occupy space. Landlords, (and/or the property management companies) frequently provide a number of services. The landlord may "build out" the leased space for the tenant's specific use--creating the look and feel you want and the functionality you need to run your business.
Commercial property owners will also probably provide heating and air conditioning, cleaning, utilities, and telephone and Internet services. Maintenance and repair of the leased property and the surrounding premises including the parking lots and common areas are also generally the landlord's responsibility. This includes the parking lot, pothole repair, lawn and landscape, elevators and security. These are all things that should be clearly spelled out in your lease agreement.
Now, your responsibilities is probably no more than keeping the space well maintained and paying for use of the leased space and the bundled services--and doing so on time!
To have some assurance that a tenant gets what it was told it would get and what it is paying for, every commercial lease should at least:
State in detail landlord's responsibilities to tenant. Things like when the heating and air conditioning will be on and how the property will be kept secure.
Describe what happens if the contract is broken. The lease should define what constitutes a default by the landlord and/or the tenant, as well as provide a method for a quick, inexpensive and final resolution to any disputes.
The best advice is to read the lease thoroughly and go over it with your real estate attorney. A tenant should be sure that these issues are addressed in a proposed lease to avoid any future questions or disputes.
Best of luck, and please contact Kuester if you would like to know what properties may be available in the Fort Mill area.
Property Manager
www.kuester.com
Sunday, May 31, 2009
Before signing a commercial property lease
Dear Property Manager:
My best friend has decided to open a preschool in the Concord, (North Carolina) area and I am considering going into a partnership with her. We have both owned our own businesses before, but never leased a space. We have looked at several locations together but haven’t made any decisions. My biggest concern is just not knowing enough about commercial leases. What do we need to do before we sign? Does Kuester have any available properties in Concord?
Thank you so much for your help.
Sheryl J. Concord, NC
Hi Sheryl,
There are several things you need to know before signing a commercial lease, yet the biggest thing is to review the lease thoroughly. Read it, review with your attorney, and ask any questions, and get clarification before committing. Below are some of the most important points:
1) Before reviewing the agreement, make sure that you are listed properly as one of the parties. Many do not look closely at this, yet it could cause a huge headache later on. Also remember, to avoid liability, if the company is a corporation or an LLC, the company name (not your personal name), should be what appears on the lease.
2) Discuss the length and rent. Note when the property owner will be raising the rent and negotiate the terms to where you & your partner feel comfortable. Just because it is written on the lease, does not mean you won’t be able to make some modifications in your negotiations.
3) Evaluate the security clause carefully and ask who is responsible for securing the premises, if there is a security system (or can one be installed), and if the landlord has access to the leased space, (and under what conditions).
Best of luck and yes, we do have properties in your area that would suit your needs well. You can find all of our commercial property listings, in Concord, Boone, Myrtle Beach, Charlotte, and Fort Mill at http://www.kuester.com/properties/. Please let us know if there is anything we can be of assistance with as you look at properties.
Property Manager
Kuester Property Management:
Serving Concord, Fort Mill, Charlotte, Myrtle Beach, & Boone
My best friend has decided to open a preschool in the Concord, (North Carolina) area and I am considering going into a partnership with her. We have both owned our own businesses before, but never leased a space. We have looked at several locations together but haven’t made any decisions. My biggest concern is just not knowing enough about commercial leases. What do we need to do before we sign? Does Kuester have any available properties in Concord?
Thank you so much for your help.
Sheryl J. Concord, NC
Hi Sheryl,
There are several things you need to know before signing a commercial lease, yet the biggest thing is to review the lease thoroughly. Read it, review with your attorney, and ask any questions, and get clarification before committing. Below are some of the most important points:
1) Before reviewing the agreement, make sure that you are listed properly as one of the parties. Many do not look closely at this, yet it could cause a huge headache later on. Also remember, to avoid liability, if the company is a corporation or an LLC, the company name (not your personal name), should be what appears on the lease.
2) Discuss the length and rent. Note when the property owner will be raising the rent and negotiate the terms to where you & your partner feel comfortable. Just because it is written on the lease, does not mean you won’t be able to make some modifications in your negotiations.
3) Evaluate the security clause carefully and ask who is responsible for securing the premises, if there is a security system (or can one be installed), and if the landlord has access to the leased space, (and under what conditions).
Best of luck and yes, we do have properties in your area that would suit your needs well. You can find all of our commercial property listings, in Concord, Boone, Myrtle Beach, Charlotte, and Fort Mill at http://www.kuester.com/properties/. Please let us know if there is anything we can be of assistance with as you look at properties.
Property Manager
Kuester Property Management:
Serving Concord, Fort Mill, Charlotte, Myrtle Beach, & Boone
Wednesday, May 20, 2009
Commercial Lease Terms
Dear Property Manager,
I have decided to take my home-based book-keeping, and virtual assistant business and move it into a small office. My problem is I don’t know any of the “lingo” or what the clauses in the commercial lease contracts mean. Is there a place I can look or a list of the most common commercial lease terms?
Thank you for your help –
Madeleine Y.
Boone, NC
Dear Madeleine,
Here are some important terms with which you will need to familiarize yourself before signing your commercial lease, however, you will also want to work with a real estate attorney, who will assist you in getting the details of the contract right for you.
Use Clause: How the space can and cannot be used. Ask any question if this is unclear, and make sure that this clause is as fair to you as well as to your new landlord.
Exclusive Clause: Limits competing businesses from opening up in the same complex, or next door, if the landlord owns the other property/spaces in the immediate vicinity.
Premises: The premises should be defined clearly to be just the building, or space, or also include the parking lot or facility, bathrooms, kitchen, etc and spell out common areas shared by other tenants.
Parties: “Parties” refers usually to the landlord and tenant, (“lessor” and “lesee”) and should specifically name you in the contract. (Make sure to verify the names for correct spelling, etc.)
Term Clause: The length of your lease and specifically the starting and ending dates. This should begin after you have all necessary insurance and are ready to start business, not necessarily on the day the contract is signed.
Rent: Specifically states rent, and if it isn’t otherwise state should include improvements and maintenance costs if you are responsible, as well as rate increases or the “fixed rate’ cost.
Security Deposits: What amount you are required to give the landlord as a deposit. This is a safety measure for the landlord in case you miss a payment, or break an agreement, such as the state of the space, (maintenance needed) after your move out. If there are no issues, then this amount will be returned to you, unless otherwise stated.
Build-outs (Improvements and Alterations): If your new space will have to be customized to fit your needs, the lease should address this. The landlord may require an agreement about who does the design, contractors, timeline, payment, etc. This is important if your space isn’t move-in ready.
Insurance Clauses: Your landlord may require a specific kind of insurance (property, liability, rental interruption, and/or leasehold), to insure against things that are beyond their control (and sometimes yours). You will want to discuss your specific needs with a business insurance broker.
Other Clauses: Parking, Signs, Landlord’s Entry, and Security: There will (or should) be several paragraphs about whether you can put up signage, and the requirements there-of, as well as when and how the landlord can have access to your space, where you and your staff and customers can park, and the security of the property.
The key to successfully leasing a commercial property is to review all of the possibilities with an experienced attorney. Ultimately, you want to avoid surprises. Try to ensure that all of your business needs are covered and that you can run your business comfortably for the term of the lease.
Good luck and remember that your team (accountant, broker, commercial real estate agent, and attorney) will be vital to finding the right property and negotiating the right terms for you and your business. Make sure you heed their advice, or seek a second opinion if you are unsure. Signing a commercial lease is a big responsibility, and can ultimately lead to the success of your business.
If you would like to talk to one of our commercial property specialists in your area, please call our Boone, NC office at 803.578.7725.
Property Manager
Kuester: Boone, North Carolina
I have decided to take my home-based book-keeping, and virtual assistant business and move it into a small office. My problem is I don’t know any of the “lingo” or what the clauses in the commercial lease contracts mean. Is there a place I can look or a list of the most common commercial lease terms?
Thank you for your help –
Madeleine Y.
Boone, NC
Dear Madeleine,
Here are some important terms with which you will need to familiarize yourself before signing your commercial lease, however, you will also want to work with a real estate attorney, who will assist you in getting the details of the contract right for you.
Use Clause: How the space can and cannot be used. Ask any question if this is unclear, and make sure that this clause is as fair to you as well as to your new landlord.
Exclusive Clause: Limits competing businesses from opening up in the same complex, or next door, if the landlord owns the other property/spaces in the immediate vicinity.
Premises: The premises should be defined clearly to be just the building, or space, or also include the parking lot or facility, bathrooms, kitchen, etc and spell out common areas shared by other tenants.
Parties: “Parties” refers usually to the landlord and tenant, (“lessor” and “lesee”) and should specifically name you in the contract. (Make sure to verify the names for correct spelling, etc.)
Term Clause: The length of your lease and specifically the starting and ending dates. This should begin after you have all necessary insurance and are ready to start business, not necessarily on the day the contract is signed.
Rent: Specifically states rent, and if it isn’t otherwise state should include improvements and maintenance costs if you are responsible, as well as rate increases or the “fixed rate’ cost.
Security Deposits: What amount you are required to give the landlord as a deposit. This is a safety measure for the landlord in case you miss a payment, or break an agreement, such as the state of the space, (maintenance needed) after your move out. If there are no issues, then this amount will be returned to you, unless otherwise stated.
Build-outs (Improvements and Alterations): If your new space will have to be customized to fit your needs, the lease should address this. The landlord may require an agreement about who does the design, contractors, timeline, payment, etc. This is important if your space isn’t move-in ready.
Insurance Clauses: Your landlord may require a specific kind of insurance (property, liability, rental interruption, and/or leasehold), to insure against things that are beyond their control (and sometimes yours). You will want to discuss your specific needs with a business insurance broker.
Other Clauses: Parking, Signs, Landlord’s Entry, and Security: There will (or should) be several paragraphs about whether you can put up signage, and the requirements there-of, as well as when and how the landlord can have access to your space, where you and your staff and customers can park, and the security of the property.
The key to successfully leasing a commercial property is to review all of the possibilities with an experienced attorney. Ultimately, you want to avoid surprises. Try to ensure that all of your business needs are covered and that you can run your business comfortably for the term of the lease.
Good luck and remember that your team (accountant, broker, commercial real estate agent, and attorney) will be vital to finding the right property and negotiating the right terms for you and your business. Make sure you heed their advice, or seek a second opinion if you are unsure. Signing a commercial lease is a big responsibility, and can ultimately lead to the success of your business.
If you would like to talk to one of our commercial property specialists in your area, please call our Boone, NC office at 803.578.7725.
Property Manager
Kuester: Boone, North Carolina
Friday, May 15, 2009
Options in Commercial Real Estate Leases
Dear Property Manager:
My one-year lease is almost up on my new business. I was given a discount on the price by the landlord since I was a new business, which has helped a lot, but it was only a 1-year term. Things are going well, and we have steady growth. I am trying to figure out what the best option is for me—whether to stay, or go, what the rent price will be etc. Can you tell me what my options will be if I want to stay at this location? The lease is up in August, and I know I need to handle this soon, but I am going into my busy season and have so much on my plate right now… help!
Dakota J.
Concord, NC
Dear Dakota,
Congratulations on your business success – and good luck on your exciting future!
When your commercial real estate lease is coming up, you are several options. The first option would be to renew, however, since landlords will want to raise the rent at the end of the initial agreed period, and you were given a “starter-business rate,” you will need to handle this immediately. If you can get an option to renew at a great fixed price, you may want to try to extend your lease term to 3-5 years to avoid the possibility of rent going up again this time next year.
You could also choose a short lease, (if your commercial landlord will grant you one) with one or more options to renew to give you some flexibility. In this case you will probably have a certain block of time before the initial lease term ends in which you can notify the landlord that you wish to renew. Be aware there may be an additional fee.
Another option you may wish to consider is the option for additional space, so that you can grow and expand your business. If the landlord believes in your business and your ability as a tenant to attract other businesses of interest they may offer you this additional space at a deep discount. Good luck again, and make sure you take the time to handle the details of your commercial lease as soon as possible. Where your business is located, and the ROI of that is paramount to the success of your growing business. If you would like to look at other property options in the Concord area, or discuss your options, feel free to call our Concord office at 704.973.9017.
Property Manager
Kuester Property Management
Concord, NC
My one-year lease is almost up on my new business. I was given a discount on the price by the landlord since I was a new business, which has helped a lot, but it was only a 1-year term. Things are going well, and we have steady growth. I am trying to figure out what the best option is for me—whether to stay, or go, what the rent price will be etc. Can you tell me what my options will be if I want to stay at this location? The lease is up in August, and I know I need to handle this soon, but I am going into my busy season and have so much on my plate right now… help!
Dakota J.
Concord, NC
Dear Dakota,
Congratulations on your business success – and good luck on your exciting future!
When your commercial real estate lease is coming up, you are several options. The first option would be to renew, however, since landlords will want to raise the rent at the end of the initial agreed period, and you were given a “starter-business rate,” you will need to handle this immediately. If you can get an option to renew at a great fixed price, you may want to try to extend your lease term to 3-5 years to avoid the possibility of rent going up again this time next year.
You could also choose a short lease, (if your commercial landlord will grant you one) with one or more options to renew to give you some flexibility. In this case you will probably have a certain block of time before the initial lease term ends in which you can notify the landlord that you wish to renew. Be aware there may be an additional fee.
Another option you may wish to consider is the option for additional space, so that you can grow and expand your business. If the landlord believes in your business and your ability as a tenant to attract other businesses of interest they may offer you this additional space at a deep discount. Good luck again, and make sure you take the time to handle the details of your commercial lease as soon as possible. Where your business is located, and the ROI of that is paramount to the success of your growing business. If you would like to look at other property options in the Concord area, or discuss your options, feel free to call our Concord office at 704.973.9017.
Property Manager
Kuester Property Management
Concord, NC
Sunday, May 10, 2009
Can I Get Out of a Commercial Lease?
Dear Property Manager:
I and leasing a commercial property in Boone and business has slowed down quite a bit in the last year. I am looking at cutting costs, and my lease in my biggest expense. I do not think that I need as much space as I needed a year ago, and by moving into a smaller space, I will be able to save money.
Is there a way that I can get out of my commercial lease?
Rob K. Boone, NC
Dear Rob,
The answer is "it depends." Your lease may allow you to sub-lease. If this is the case, it is usually the easiest and best way to get yourself out of that space. You will still be obligated to pay the rent, but your tenant will hopefully be paying the full cost. If you are able to do this, you will probably have to get your landlord to approve the subtenant, so check with them before you go down this road.
The other two options require that you directly negotiate with the landlord. The first is a "buy-out" option where you offer to pay a negotiated lump-sum payment to the landlord, less than your remaining payments, but still more than just the next month's rent. This option may work depending on how flexible the landlord is and whether they feel they will be able to fill the vacancy quickly.
You can also work with the commercial property landlord, letting know that the payments have become a hardship. Given the current economic situation, your landlord may choose to work with you to get you into another smaller space, or even let you stay in the current one, at a reduced price, instead of risk you defaulting on the lease and then not being able to find a new tenant right away. The key is being honest about your situation and being willing to negotiate, perhaps increasing the term of the contract.
We wish you the best of luck, and continued success.
Property Manager
Boone, NC
www.kuester.com
I and leasing a commercial property in Boone and business has slowed down quite a bit in the last year. I am looking at cutting costs, and my lease in my biggest expense. I do not think that I need as much space as I needed a year ago, and by moving into a smaller space, I will be able to save money.
Is there a way that I can get out of my commercial lease?
Rob K. Boone, NC
Dear Rob,
The answer is "it depends." Your lease may allow you to sub-lease. If this is the case, it is usually the easiest and best way to get yourself out of that space. You will still be obligated to pay the rent, but your tenant will hopefully be paying the full cost. If you are able to do this, you will probably have to get your landlord to approve the subtenant, so check with them before you go down this road.
The other two options require that you directly negotiate with the landlord. The first is a "buy-out" option where you offer to pay a negotiated lump-sum payment to the landlord, less than your remaining payments, but still more than just the next month's rent. This option may work depending on how flexible the landlord is and whether they feel they will be able to fill the vacancy quickly.
You can also work with the commercial property landlord, letting know that the payments have become a hardship. Given the current economic situation, your landlord may choose to work with you to get you into another smaller space, or even let you stay in the current one, at a reduced price, instead of risk you defaulting on the lease and then not being able to find a new tenant right away. The key is being honest about your situation and being willing to negotiate, perhaps increasing the term of the contract.
We wish you the best of luck, and continued success.
Property Manager
Boone, NC
www.kuester.com
Saturday, May 2, 2009
Should I Buy a Commercial Property?
Dear Property Manager,
I have been considering purchasing a building for my web development business. Currently we rent our space, but it seems like a good time to buy and stop having to pay rent, and maybe rent out a little space and make some money as well.
Would this be a good decision? I don’t know anything about commercial real estate in the Boone area where we are now.
Chris K. Boone, NC
Dear Chris:
Many people have wondered if owning their own business location would be a good idea. The answer depends a lot on your business and financial situation, and also on your willingness to handle the responsibilities of property ownership in addition to running your business. Interest rates at near historic lows, and property costs also low, creating an opportunity for savvy entrepreneurs.
Owning your commercial property location does offer many benefits. As you pay each mortgage payment, you'll build equity –instead of having it go to rent you will never get back. And if the property value appreciates, you could make a significant amount of money when you go to sell. Since you will be the landlord, you will have control over the space – giving you the freedom to do any build-outs you wish, paint the walls purple to match your company logo, or add an employee’s lounge/patio out back! You could even decide to lease un-used space to tenants, creating an additional revenue stream.
Additionally, as the owner of your commercial property, you can make maintenance repairs on your own schedule and you won’t have to worry about rent going up next year, and the year after!
To buy your property you will probably need 20% of the value in cash. If there are tenants already in the space, you will need copies of their signed leased for the lender, and insurance against damage or loss. You will also want to consult your attorney and accountant before making any decisions. There are serious financial, legal and tax implications associated with commercial property ownership.Before finalizing your decision to buy, consider your cash situation, not only for the down payment and the mortgage payments, but for any needed repairs, maintenance or upgrades that will need to be done. Also consider what you will do if your own business outgrows the space: Will you be able to rent it and move into a bigger building? Is the location a good one for future tenants?
It is a buyer’s market, and no might be a great time to buy your commercial property. But before you take that leap, weigh all the pros and cons, and make the best decision for you and your business.
If you would like more information about the available commercial properties in Boone, or learn about property management services, please call our Boone, NC office at 803.578.7725.
Property Manager
Kuester Companies
Boone, NC
I have been considering purchasing a building for my web development business. Currently we rent our space, but it seems like a good time to buy and stop having to pay rent, and maybe rent out a little space and make some money as well.
Would this be a good decision? I don’t know anything about commercial real estate in the Boone area where we are now.
Chris K. Boone, NC
Dear Chris:
Many people have wondered if owning their own business location would be a good idea. The answer depends a lot on your business and financial situation, and also on your willingness to handle the responsibilities of property ownership in addition to running your business. Interest rates at near historic lows, and property costs also low, creating an opportunity for savvy entrepreneurs.
Owning your commercial property location does offer many benefits. As you pay each mortgage payment, you'll build equity –instead of having it go to rent you will never get back. And if the property value appreciates, you could make a significant amount of money when you go to sell. Since you will be the landlord, you will have control over the space – giving you the freedom to do any build-outs you wish, paint the walls purple to match your company logo, or add an employee’s lounge/patio out back! You could even decide to lease un-used space to tenants, creating an additional revenue stream.
Additionally, as the owner of your commercial property, you can make maintenance repairs on your own schedule and you won’t have to worry about rent going up next year, and the year after!
To buy your property you will probably need 20% of the value in cash. If there are tenants already in the space, you will need copies of their signed leased for the lender, and insurance against damage or loss. You will also want to consult your attorney and accountant before making any decisions. There are serious financial, legal and tax implications associated with commercial property ownership.Before finalizing your decision to buy, consider your cash situation, not only for the down payment and the mortgage payments, but for any needed repairs, maintenance or upgrades that will need to be done. Also consider what you will do if your own business outgrows the space: Will you be able to rent it and move into a bigger building? Is the location a good one for future tenants?
It is a buyer’s market, and no might be a great time to buy your commercial property. But before you take that leap, weigh all the pros and cons, and make the best decision for you and your business.
If you would like more information about the available commercial properties in Boone, or learn about property management services, please call our Boone, NC office at 803.578.7725.
Property Manager
Kuester Companies
Boone, NC
Sunday, March 22, 2009
Choosing Tenants for Commercial Property
Dear Property Manager,
I have been leasing out a small commercial property for about a year now. I have had good luck, and bad luck with the tenants. Some are great... and well others have been a huge headache. As the lease terms are up, I want to do a better job screening my tenants. What advice can you give me and other landlords so that they get the best tenants for their commercial properties?
Henry J - Charlotte
Dear Henry,
As a landlord, having the right tenants is very important--they can be the difference between a profitable business and one that is full of dissapointment and frustration.
Problem tenants, may or may not be easy to spot at the onset - and your "gut instinct" could put you in an unfavorable position with a cronic late-payer, or worse.
We have 10 recommendations that you, and other landlords can follow to choose the best potential tenants.
1. Use a rental application. A completed rental application will give you the the starter information you will need to know about the applicant, including references.
2. Follow the Fair Housing Act (FHA). This act is in place to ensure that landlords are not denying someone the ability to rent property based on race, religion, or similar reasons. Make sure to follow the regulationa and avoid claims of discrimination by adhere to the FHA's code of ethics for landlords.
. Get proof of identity. Insist on seeing a valid photo identification card from your potential tenants. The rental application should include a section to write down the driver's license number. Make a photocopy of the photo ID to attach to the application.
4. Perform a background check. Checking up on your potential tenant's past may not be fun, but it can help ensure that there are no preexisting problems lurking beneath the surface. If your potential tenant has a history of skipping rent or destroying property, you may be able to find this out through a background check.
5. Perform a credit check. In addition to a background check, you can check a potential renter's credit history. You will need to get his or her permission in writing as well as their Social Security number to perform this check.
6. Get the name of the previous landlord. Not all landlords report problem tenants to the authorities, so it's a good idea to follow up and check with their former landlord.
7. Ask for character references. Ask for references ? and actually check with them. Not all applicants will give you "real" references, so following up is essential.
8. Meet your prospective tenants in person. In our busy world, many people are switching to digital communication and phone meetings. However, it's important to take the time to actually meet face to face with your potential tenants. This will help you get an idea about their personalities, and goes a long way toward making a lasting relationship.
9. Protect yourself. In addition to following the FHA, your rental application should state what you will do with the information your potential tenants provide. If you do not have their permission to run their credit report, you may not do so. Be up front by explaining your process, so you'll be protected from potential future allegations of impropriety.
10. Include a written code of conduct with the rental application or written lease. This should clearly state what's expected of you and your tenant, and will allow you to make sure everything is clearly explained. Have the prospective tenant sign that they have read the code of conduct.
By covering all your bases, you can help ensure that you will not only have the best tenants for your rental property, but also that your rights and the rights of your potential tenants are being protected.
I have been leasing out a small commercial property for about a year now. I have had good luck, and bad luck with the tenants. Some are great... and well others have been a huge headache. As the lease terms are up, I want to do a better job screening my tenants. What advice can you give me and other landlords so that they get the best tenants for their commercial properties?
Henry J - Charlotte
Dear Henry,
As a landlord, having the right tenants is very important--they can be the difference between a profitable business and one that is full of dissapointment and frustration.
Problem tenants, may or may not be easy to spot at the onset - and your "gut instinct" could put you in an unfavorable position with a cronic late-payer, or worse.
We have 10 recommendations that you, and other landlords can follow to choose the best potential tenants.
1. Use a rental application. A completed rental application will give you the the starter information you will need to know about the applicant, including references.
2. Follow the Fair Housing Act (FHA). This act is in place to ensure that landlords are not denying someone the ability to rent property based on race, religion, or similar reasons. Make sure to follow the regulationa and avoid claims of discrimination by adhere to the FHA's code of ethics for landlords.
. Get proof of identity. Insist on seeing a valid photo identification card from your potential tenants. The rental application should include a section to write down the driver's license number. Make a photocopy of the photo ID to attach to the application.
4. Perform a background check. Checking up on your potential tenant's past may not be fun, but it can help ensure that there are no preexisting problems lurking beneath the surface. If your potential tenant has a history of skipping rent or destroying property, you may be able to find this out through a background check.
5. Perform a credit check. In addition to a background check, you can check a potential renter's credit history. You will need to get his or her permission in writing as well as their Social Security number to perform this check.
6. Get the name of the previous landlord. Not all landlords report problem tenants to the authorities, so it's a good idea to follow up and check with their former landlord.
7. Ask for character references. Ask for references ? and actually check with them. Not all applicants will give you "real" references, so following up is essential.
8. Meet your prospective tenants in person. In our busy world, many people are switching to digital communication and phone meetings. However, it's important to take the time to actually meet face to face with your potential tenants. This will help you get an idea about their personalities, and goes a long way toward making a lasting relationship.
9. Protect yourself. In addition to following the FHA, your rental application should state what you will do with the information your potential tenants provide. If you do not have their permission to run their credit report, you may not do so. Be up front by explaining your process, so you'll be protected from potential future allegations of impropriety.
10. Include a written code of conduct with the rental application or written lease. This should clearly state what's expected of you and your tenant, and will allow you to make sure everything is clearly explained. Have the prospective tenant sign that they have read the code of conduct.
By covering all your bases, you can help ensure that you will not only have the best tenants for your rental property, but also that your rights and the rights of your potential tenants are being protected.
Saturday, March 7, 2009
Before You Sign a Commercial Property Lease
Dear Property Manager,
My partner and I are about to embark on a huge—and hopefully successful adventure as we take the “plunge” and start our own consulting business. We are looking at an office space in the Carolina area, either North or South Carolina in the Fort Mill, or Indian Land areas.
Being brand new in this process, we need to know-- what we need to know-- before we sign that commercial property lease!
Any guidelines you have you be much appreciated.
Tony L., Charlotte, NC
Dear Tony,
As I am sure you have noticed, renting office space in this area can be expensive, and quite complicated. That said there are also some great deals and wild differences in price from one place to another—and once you find the right place, then you get to start the lease negotiation process.
Since this is your first time renting a commercial space, there are a few things you should know before you sign anything. First, there are no standard lease agreements, and some include a lot of details, and others do not. No matter what property or leasing company you ultimately work with, you should have your contract reviewed.
Secondly, your lease is a legal and binding contract—one which you should not enter into unless you intend to fulfill your responsibilities. So before you sign on the dotted line, ask yourself (and your broker and landlord) these questions:
YOU:
· How long do I plan to stay? Will you be there 1 year or 5? The terms will vary depending on length.
· Can I get out of the lease? What are the penalties for breaking the lease if the business needs to close or relocate before the term is up
YOUR BROKER:
· What are your certifications? What recognized real estate associations does your broker have to distinguish them from the others in their field.
· What experience do you have in similar transactions? Commercial real estate is very specialized, and most brokers specialize on one or two property types, and certain property sizes. Choose a broker who has experience in the type of property, size and location you are looking at.
YOUR LANDLORD:
· Who are the current tenants? Are the tenants in the building compatible businesses? If you own a dry cleaning business, you may not want to be in the same building as another dry cleaner.
· What about a property manager? A manager probably won't be on site at a small building, but if a manager or maintenance person is not on the premises business hours, make sure you know who will handle emergencies and requests.
· What kind of build-outs and amenities are provided? Make sure you know if the landlord will handle and approve build-outs, and what extra amenities are available with the lease.
· Will you be allowed to sublease? If you have extra space, or need to vacate before your terms are up, some landlords will allow you to sub-let the apartment.
· What are the lease terms? The monthly rent is the most important term, however, you also need to know if rent may go up during your term, and if you're required to pay charges for maintenance, taxes or other costs.
Property Manager
Kuester Property Management
My partner and I are about to embark on a huge—and hopefully successful adventure as we take the “plunge” and start our own consulting business. We are looking at an office space in the Carolina area, either North or South Carolina in the Fort Mill, or Indian Land areas.
Being brand new in this process, we need to know-- what we need to know-- before we sign that commercial property lease!
Any guidelines you have you be much appreciated.
Tony L., Charlotte, NC
Dear Tony,
As I am sure you have noticed, renting office space in this area can be expensive, and quite complicated. That said there are also some great deals and wild differences in price from one place to another—and once you find the right place, then you get to start the lease negotiation process.
Since this is your first time renting a commercial space, there are a few things you should know before you sign anything. First, there are no standard lease agreements, and some include a lot of details, and others do not. No matter what property or leasing company you ultimately work with, you should have your contract reviewed.
Secondly, your lease is a legal and binding contract—one which you should not enter into unless you intend to fulfill your responsibilities. So before you sign on the dotted line, ask yourself (and your broker and landlord) these questions:
YOU:
· How long do I plan to stay? Will you be there 1 year or 5? The terms will vary depending on length.
· Can I get out of the lease? What are the penalties for breaking the lease if the business needs to close or relocate before the term is up
YOUR BROKER:
· What are your certifications? What recognized real estate associations does your broker have to distinguish them from the others in their field.
· What experience do you have in similar transactions? Commercial real estate is very specialized, and most brokers specialize on one or two property types, and certain property sizes. Choose a broker who has experience in the type of property, size and location you are looking at.
YOUR LANDLORD:
· Who are the current tenants? Are the tenants in the building compatible businesses? If you own a dry cleaning business, you may not want to be in the same building as another dry cleaner.
· What about a property manager? A manager probably won't be on site at a small building, but if a manager or maintenance person is not on the premises business hours, make sure you know who will handle emergencies and requests.
· What kind of build-outs and amenities are provided? Make sure you know if the landlord will handle and approve build-outs, and what extra amenities are available with the lease.
· Will you be allowed to sublease? If you have extra space, or need to vacate before your terms are up, some landlords will allow you to sub-let the apartment.
· What are the lease terms? The monthly rent is the most important term, however, you also need to know if rent may go up during your term, and if you're required to pay charges for maintenance, taxes or other costs.
Property Manager
Kuester Property Management
Saturday, February 21, 2009
Lease Agreements: Property Management
Dear Property Manager,
I have owned a commercial building in Concord for 2 years that I took over when my father passed away. I had hired my brother-in-law to handle the property management for me, but I am realizing now that this was a mistake. The tenants have been complaining about lawn maintenance, and building upkeep—including areas that I think are their responsibility, and have joined together saying that they will not pay rent this month unless I take care of these things. My lease agreement states that the tenants accept the premises “as is”—and are responsible for the inside building maintenance, but one of my tenants is an attorney, so I need to be careful. I don’t want to lose the tenants, but I don’t know how to make all the changes without increasing rent, or even if I am legally obligated to do so.
I need to help with this situation—and then hire a professional maintenance company. Do you have any suggestions?
Gary H. Concord, NC
Dear Gary –
First off, I need to say that I am not a commercial real estate attorney – and clearly you need to talk to yours.
What I can tell you is that most commercial leases provide that the landlord will take care of things like maintenance of the common areas of the property – and that includes the lawn maintenance, parking lot, common hallways or sidewalks. Generally, unless the property is a single-tenanted building, the lawn, for example, is not under their control. There is a part of your lease that deals with your specific landlord obligations, and probably addresses what you are responsible for. It would probably be best for you to consult your lawyer to assist in interpreting whether you are entitled to recover the costs associated with upkeep of the common areas, and repairs. But my recommendation would be to make the repairs and hire a qualified property management company immediately to deal appropriately with tenant satisfaction and management. In the long run, you will save money and frustration, and keep your building filled—which in this economy is especially important.
If you would like to speak to someone in our Kuester Concord office, give us a call at 803.578.7701.
Property Manager
Kuester Property Management
I have owned a commercial building in Concord for 2 years that I took over when my father passed away. I had hired my brother-in-law to handle the property management for me, but I am realizing now that this was a mistake. The tenants have been complaining about lawn maintenance, and building upkeep—including areas that I think are their responsibility, and have joined together saying that they will not pay rent this month unless I take care of these things. My lease agreement states that the tenants accept the premises “as is”—and are responsible for the inside building maintenance, but one of my tenants is an attorney, so I need to be careful. I don’t want to lose the tenants, but I don’t know how to make all the changes without increasing rent, or even if I am legally obligated to do so.
I need to help with this situation—and then hire a professional maintenance company. Do you have any suggestions?
Gary H. Concord, NC
Dear Gary –
First off, I need to say that I am not a commercial real estate attorney – and clearly you need to talk to yours.
What I can tell you is that most commercial leases provide that the landlord will take care of things like maintenance of the common areas of the property – and that includes the lawn maintenance, parking lot, common hallways or sidewalks. Generally, unless the property is a single-tenanted building, the lawn, for example, is not under their control. There is a part of your lease that deals with your specific landlord obligations, and probably addresses what you are responsible for. It would probably be best for you to consult your lawyer to assist in interpreting whether you are entitled to recover the costs associated with upkeep of the common areas, and repairs. But my recommendation would be to make the repairs and hire a qualified property management company immediately to deal appropriately with tenant satisfaction and management. In the long run, you will save money and frustration, and keep your building filled—which in this economy is especially important.
If you would like to speak to someone in our Kuester Concord office, give us a call at 803.578.7701.
Property Manager
Kuester Property Management
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