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Are you looking for office space? Planning to relocate to a new building? Signing a lease for a commercial property is a big step for any business owner.

 

Nevertheless, you’ll need to do some research and consider your options before finalising your commercial lease, moving in, and getting your business up and running.

 

Here are some important questions you should ask to help you determine the ideal office space for your company.

What is the type of commercial lease given?

 

When considering commercial properties for your new office, you should find out the type of commercial lease being offered. This is because the type of lease will determine how your rent will be calculated and any other obligations under it.

 

Generally, there are four distinct types of leases, which are:

 

Gross lease

In this case, the tenant pays basic rent. The property owner covers all operating expenses for the commercial property, including maintenance, utilities, real property taxes and landlord insurance.

 

Triple net lease

For this net lease, the building occupant has to pay for some expenses of the property in addition to the gross rental. These expenses include property taxes, landlord’s insurance, and maintenance and upkeep costs.

 

Absolute net lease

The tenant is responsible for all maintenance and real estate operating costs of the property.

 

Modified gross lease

For a modified gross lease agreement, tenants pay the rent plus a portion of the incurred operating expenses. How these expenses are calculated, and split varies depending on the lease terms.

Are the terms negotiable?

 

When in doubt, always check if there is room for negotiation. A great way to gauge if you’ll have an amicable relationship with your soon-to-be landlord is to find out how flexible the lease terms are.

 

Be sure to work out any terms or aspects of the agreement that need revision with your potential landlord to ensure you get the best deal that works in both your favours.

 

Can the space be modified?

 

While it is possible to find the perfect space with just what you need for your business, most likely, the space will need some fixing up or alterations to accommodate your business operations or office layout.

 

So, before you sign the lease on a commercial property, check with the landlord if it is acceptable to modify the space (interior or exterior). Some landlords may request that the space layout remain as it is or allow slight modifications within their stipulations.

 

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What amenities are available?

 

Amenities and building facilities are among the most important things to take note of when leasing business property. Some vital office amenities include internet access points, pantry, washrooms, electricity and air conditioning.

 

Aside from providing a productive and comfortable working environment, these amenities and building services will also count towards your monthly rent, maintenance costs, cleaning and more. If you’re on a budget, this may impact your leasing decision. 

 

Is the building up for sale?

 

Once you’ve viewed the building and decided to proceed, there is another matter that you shouldn’t overlook. Be sure to have a conversation with your future landlord about whether or not they intend to sell the commercial property you’ll be leasing.

 

Rest assured that you won't be affected if the property is sold during your tenancy term. Essentially, the property buyer will inherit any tenants and be the new landlord. However, if your landlord has given you a heads up about a possible sale, you should enquire whether the new owner would possibly occupy the premises themselves and choose not to renew your lease.

 

To sum it up, if you keep these points in mind, you’ll find your new office location in no time. Before you take the plunge and sign on that dotted line, take your time and weigh the pros and cons of the commercial buildings you’ve set your sights on.

 

This article is for informational purposes only and CIMB does not make any representation and warranty as to the accuracy, completeness and fairness of any information contained in this article. As this article is general in nature, it is not intended to address the circumstances of any particular individual or entity. You are advised to consult a financial advisor or investment professional before making any decisions based on the information contained in this article. CIMB assumes no liability for any consequences arising from your reliance on the information presented here.