Retail Leasing Austin Texas

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Retail space Austin TXLeasing Retail Space

As a tenant when you, you are typically responsible for all maintenance that is provided to your retail space.

Sometimes this part of the lease can be the most confusing for tenants. Do you have a good market knowledge of what to ask for when it comes to maintenance?  A broker will and will be able to ask the right questions to apply the best leverage possible for retail leasing.

Who is responsible for Maintenance and Signage?

Can the landlord provide an estimate of monthly maintenance costs for the retail space?  What about signage? Let’s not forget about signage it is most likely outside of other marketing efforts one of the most important marketing items you have to consider regarding visibility and design.

Expenses

Who is responsible for what, what is covered by the landlord and what has to be paid for by you as the tenant. Retail leasing can be the most complicated commercial real estate transaction there is versus office and warehouse properties.Depending on the retail space you lease, some utilities may be part of your lease rate and some may not be. You may be responsible for utilities based on a percentage or based on the square footage your occupy within the retail center.

Are Water and sewer are typically included in your lease rate? What about gas if applicable, trash removal and janitorial costs? 

Landlord history?

Does the current landlord have a good reputation?

When there is an uncertain market a tenant – broker should ensure that you aren’t signing a lease in a property that is under any kind of financial hardship. Surely as a tenant you would not want to be in a situation where a property was to be foreclosed on, this is not typical for Austin however in 2016.

Asking the right questions are easy when a professional broker is asked to help a tenant acquire a retail space, it takes the guessing game out of the equation.

Quick leasing Do’s or Dont’s

  • Who pays for what repairs?
  • Additional fees?
  • Utilities , what is covered?
  • How are utilities metered?
  • Landlord history?
  • How much tenant improvement is required?

Also to consider is what if your business is interrupted? What can you do? Learn more about business interruption insurance

 

Commercial Real Estate Leases

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Commercial Real Estate Leases

– Not so simple

Here is a great real life example of how a tenant can put themselves into a not so favorable position.  Recently, we had a call from a tenant who seemed to take on too much warehouse space in the Austin area.  Their game plan was to stop bleeding money so they contacted us about subleasing. Before we got involved, we asked them a very simple question. “Did you read the sublease provision in your commercial real estate lease?” The answer was “Well I have glazed over it”.

Moving thru the leases details

As a responsible broker, we asked them to send us a copy of their master lease so we could review the language. Case in point , within the commercial real estate lease there was language saying that their landlord can charge them up to in excess of $3000.00 if they chose to sublease their space. This fee was to cover the landlord’s costs supposedly of checking the sub lessee’s credit.  Ok, folks .. here is why it is important to utilize a commercial real estate broker versus doing it yourself. Typically, some people say to themselves “I can just look up properties on the web and cut my own deal”.  The question is : Is it really reasonable to ask a tenant to pay a landlord $3000 to check a sub lessee’s credit?  What do you think?

 

If we represented this tenant, we would have asked to strike this language. Why? it is a pure profit ploy and does not benefit the tenant whatsoever. Small things like this can cost a business $1000’s of dollars.  A professional tenant representation broker knows from experience what to look for.  We also know when to tell you to seek the advice of an attorney for complex legal language.  Now this tenant is stuck. Can you get stuck doing the same thing? Of course, if it has been done once it can be done again and again.  A standard commercial real estate lease can be anywhere from 15-39 pages long , how would a business that does not transact commercial real estate deals day in and day out know what to look for?  (Rhetorical question of course) .  So why take the chance? Isn’t it time for you to offload this concern to a professional broker than can serve your best interests and not the landlords?