What to Consider Before Renewing Your Industrial Real Estate Lease
1. Focus on the specifics.
The language in a lease is obviously the most important part but you do not want to get caught up in all of the fluff to the point that you get distracted. The clarity of the language is what you want to pay attention to, especially the specific numbers, such as square footage. Almost all leases will define the space in terms of square footage but it is not uncommon for leases to be recycled from year to year. Make sure that the lease is accurately depicting the space so that you do not overpay for a landlord’s laziness. Similarly, there are certain terms like usable and common areas that may be described in similar terms but are actually completely different and can affect your multiplying factor.
2. Look at all of your options and stay aware of the turns of the market.
You don’t want to sign a document without recognizing all of your options to make sure that you are choosing the best options. Just because you are renewing a lease does not mean that a better space for your industry hasn’t appeared in the time of your previous commitment. It is important to keep up with the real estate market and maximize your options to the fullest degree. Similarly, you should not go into this process without a plan. Although it may be familiar territory, it is important to stay prepared to discuss things such as operating costs, the assets of a space, and your landlord’s renewal profit.
3. Do not be afraid to negotiate the terms of your lease.
There are many things, such as the above mentioned operating costs, that do not directly affect your company or the space itself that can easily be negotiated. Another important area of negotiation is the cap of the escalation clause, because you don’t want a significant increase in your rent during the time that you are in the space.
At NAI Isaac Commercial Properties, we are your commercial and industrial real estate experts. Call us today so that you make the best decision for both your company and your wallet. We are located in Lexington, Kentucky and serve the surrounding area.