5 Different types of Tampa Commercial Real Estate

Commercial real estate (CRE) covers a wide range of property types that serve business needs. From towering office buildings, to diners, commercial properties come in various shapes and sizes reflecting the diverse range of businesses they host. Investors, entrepreneurs and developers benefit from understanding the categories within real estate to make well informed decisions. Let’s delve into an overview of the five types of commercial real estate properties;

1. Office Space

Office buildings are among the forms of commercial real estate. These properties can vary from single tenant office buildings to towering skyscrapers located in bustling city centers. Office buildings are typically classified into three categories:

• Class A; Newer high end properties offering top notch amenities, located in highly desirable areas and boasting premium finishes.
• Class B; Typically well maintained buildings with facilities that may not match Class A’s appeal but still offer quality spaces.
• Class C; Older properties with fewer amenities that might need refurbishment; usually found in less sought after locations.

2. Retail/Dining Establishments

Retail properties serve as venues for selling consumer goods and services.

Pam Pester of Tampa Commercial Real Estate says, “Retail properties encompass a variety of spaces, including shops and cafes, as well as large shopping centers and malls. These properties are strategically positioned to attract foot traffic and increase consumer visibility. They can stand alone or be part of a larger mixed-use development that includes offices and/or residential units.”

3. Industrial

Industrial real estate plays a role in supporting logistics, manufacturing and warehousing activities. Typically situated outside city centers in industrial parks or near transportation hubs these properties can be classified into different types:

• Heavy Manufacturing; Customized facilities tailored for manufacturing processes.
• Light Assembly; specialized spaces used for product assembly or storage.
• Bulk Warehouse; Spacious storage areas for distribution centers.
• Flex Industrial; Spaces that blend office functions accommodating manufacturing, research and development and administrative operations.

4. Multi-Family

I reached out to Jake McClure of Burling Square Group for his take on multi-family.

“Multifamily properties are spaces designed to accommodate residential tenants. Ranging from duplexes to apartment complexes these properties are considered commercial real estate when they contain four units or more. Multi-family real estate is often where first time real estate investors make their initial investment. “

5. Special Purpose Properties

Special purpose real estate refers to properties built for specific purposes that do not neatly fit into traditional categories. This can encompass hotels, educational institutions, places of worship and medical facilities. Investing in special purpose properties typically demands a comprehension of the particular industry and market dynamics.

Having a grasp of the types of real estate is essential for individuals seeking to invest in developments or engage with the commercial real estate (CRE) sector. Each category presents features, obstacles, and possibilities. Whether you are drawn to the income potential of apartment buildings, the prime office properties locations, or industrial sites there is a niche, within the CRE market that aligns with your interests.

At Mobiliti CRE, our dedication lies solely in serving tenants across Tampa Bay and throughout Florida, guiding them through relocations, expansions, reductions, and subleasing processes. Additionally, we extend our expertise to businesses in search of purchasing office spaces, medical offices, flex, and industrial properties. For comprehensive support with all your commercial real estate requirements, contact us at (813)-300-2227 or send an email to pam@mobiliticre.com.

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Choosing the right space involves more than just the bottom line. For your employees, clients and vendors, your commercial space creates the first impression they perceive of your company. Selecting the right aesthetics and design can boost employee productivity, morale, and retention.  The typical commercial tenant only participates in the lease process every five to ten years. For small to mid-sized tenants who do not have in-house real estate personnel, the process of locating the right space and obtaining the best terms can sometimes be frustrating and somewhat mysterious. The following tips are designed to help you negotiate the process from reviewing your existing lease to moving in.

8 Pro Tips for Effective Commercial Real Estate Leasing

BEFORE YOU DO ANYTHING ELSE REVIEW YOUR CURRENT LEASE.

Your existing Commercial Real Estate Leasing may have provisions requiring you to pay increased rent if you stay beyond lease expiration (holdover), provisions requiring you to restore the premises to its previous condition (restoration), notice requirements relating to options to extend and provisions outlining the landlord’s rights to show your space while you are still occupying it, among others. Know your rights and obligations before you begin searching for new space!

ASSEMBLE A TEAM, A TIMELINE AND A BUDGET.

One of the most important steps in the leasing process is to get all decision makers involved from the outset.  Assemble an internal team and appoint one person as the point person.  Next establish a timeline and a realistic budget.  Finally, hire an experienced tenant representation broker who specializes in representing tenants leasing your property type (office, industrial, medical etc.) in your geographic area.  Hiring an experienced tenant representative will save you time and money.

DETERMINE HOW MUCH SPACE IS NEEDED.

The first thing we recommend is to poll existing personnel to determine how often they are on site and how they actually use the space.  Office tenants can get a rough idea of space requirements by using an office space calculator like the one on our website at https://mobiliticre.com/commercial-office-space-for-lease/.  Keep in mind that not all spaces are equal.  Some buildings are more efficient than others and that efficiency will translate into the need for less space.  Luckily most large landlords will provide free access to their architect to assist with the space planning process.

WHAT TO DO BEFORE YOU TOUR SPACES.

If at all possible, include all members of the decision-making team on the initial tour.  Frequently the most desirable spaces lease quickly, and you want to be certain that your team can move quickly.  Your tenant representation broker will typically provide you with a booklet outlining relevant details for each space you will tour prior to the actual tour.  If possible, review that booklet prior to touring.

While touring be sure to ask the landlord’s broker if the building can accommodate any special needs and ask any questions you may have regarding the space and the building.  Make sure to investigate things such as parking, ingress and egress to the building, elevators, bathrooms, tenant mix etc.  Lastly, as if other tenants have already received offers for the space.  There is nothing worse than spending a lot of time negotiating for a space only to have it leased by another tenant who toured before you.

COMPARE OPTIONS AND PERFORM A FINANCIAL ANALYSIS.

Following the tour you will select from the most attractive options.  We recommend selecting a minimum of two and preferably at least three options to compare.  Once options are selected, your tenant representative broker will prepare a Request for Proposal from the various landlords.  Keep in mind that the initial landlord proposals do not necessarily reflect a landlord’s best offer.  Once all landlord responses are received, your tenant representative broker will encourage the respective landlords to offer better terms in order to win the business.  Once all final offers are received your tenant representative broker will prepare a financial analysis comparing the true cost of each option selected.

NEGOTIATING THE DETAILS OF YOUR LEASE.

Once you have narrowed your selection to your preferred choice it will be time to request a draft lease from your prospective landlord.  While your commercial real estate broker will review the lease to ensure that all of the business points in the lease reflect those previously agreed to, we cannot stress how important it is to have the lease reviewed by an attorney.

You will be living with this lease for a long time, and it is important that from a legal perspective you obtain the best terms possible and that you understand all of the provisions in the lease.  While a complete discussion of various lease provisions is beyond the scope of this article, you can read such a discussion in our tenant guide at https://mobiliticre.com/tenant-guide.

HOW TO GET THE TENANT BUILDOUT YOU BARGAINED FOR.

For most tenants in the Tampa Bay area (excluding large, sophisticated tenants or those in the construction industry) it makes sense for the landlord to be responsible for all tenant improvement work.  By placing the landlord in charge, tenant can avoid liability for construction delays and cost overruns.  Rent will not commence until the space is complete.

Prior to submitting a leasing proposal to a tenant, the landlord will typically request that the tenant mark up a floor plan of the space indicating all requested work such as relocating walls, installation of electrical outlets, lights etc.  Landlord will then either simply forward that drawing to landlord’s architect, or in some cases tenant might meet face to face with landlord’s architect.

Once the design is finalized landlord will submit the design to one or more contractors for pricing.  The amount of the tenant improvement allowance the landlord is willing to pay for will depend on a number of factors such as the length of the lease, tenant’s credit and materials selected.  It is imperative that tenant gain approval of the final design prior to signing a lease as any subsequent changes made by tenant that increase costs will typically become the responsibility of tenant.

THE MOVE.

Relocating a business can be more complicated than one would initially expect. Ensuring that you hire the right moving company is critical. Your moving company will often be your most important initial contact with your new landlord, and it is important that the moving experience be a positive one for all parties involved.  It is often helpful to ask for mover recommendations from your existing landlord and your new landlord.  They may also have recommendations for IT companies.

We hope that these tips have given you a basic understanding of the commercial real estate leasing process.  If you have any questions regarding commercial real estate do not hesitate to reach out to us.

At Mobiliti CRE we focus 100% on representing tenants with relocations, expansions, contractions, and subleases throughout Tampa Bay and the entire State of Florida.  We also assist businesses that are looking to purchase office, medical office, flex and industrial space.  Reach out to us for assistance with all of your commercial real estate needs at (813)-300-2227 or email us at pam@mobiliticre.com

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Demystifying Commercial Lease Agreement: What Tenants Should Look For

Signing a commercial lease agreement is a big step for any company. It’s a commitment that can have a significant influence on the economics and operations of your organization. As a result, tenants must thoroughly comprehend the lease’s terms and conditions before signing anything. We will deconstruct commercial lease agreements and highlight what tenants should look for to achieve a successful and mutually beneficial leasing experience in this article.

Structure of Rent

The rent structure is one of the most important factors to consider in a commercial leasing arrangement. Tenants must be aware of how rent is determined and any potential adjustments during the lease term. The following are examples of common rent structures:

In a gross lease, the tenant pays a fixed monthly rent while the landlord covers running expenditures such as utilities, property taxes, and maintenance. This provides monthly expenses that are predictable.

A net lease requires the tenant to pay a percentage of the operational expenditures, which may include property taxes, insurance, and upkeep. It is critical to understand the expenses you will be liable for and to budget properly.

A percentage lease, which is common in retail premises, entails paying a base rent plus a portion of your sales earnings. Understanding the percentage and how it is calculated is critical in this scenario.

Lease Period

Another critical consideration is the length of the lease. When negotiating lease terms, tenants should consider their company’s long-term ambitions and stability. Lease terms that are commonly used include:

• Short-term leases: These can be as short as one year and give flexibility, although the rent may be higher.
• Long-term Leases: Longer leases, often of five years or more, can give stability and potential rent discounts, but they require a larger commitment.

Check that the lease period corresponds to your business strategies and growth expectations.

Options for Renewal

Tenants should be aware of their options for renewal. These provisions allow you to extend your lease if necessary, usually at a predetermined fee. Understanding the renewal terms and conditions will help you avoid last-minute surprises and ensure that your business can continue to operate from the same site if necessary.

Tenant Improvements

Tenants who lease commercial space frequently need to make alterations to customize the leased premises to their business needs. Determine who is responsible for these upgrades and the expenditures connected with them. Tenant improvement (TI) allowances can sometimes cover all expenses or at least offset some expenses, but these terms must be negotiated in advance.

Maintenance and Repair Responsibilities

Understanding your maintenance and repair obligations is critical. In some circumstances, the landlord may cover these expenses, while in others, the tenant is responsible. It’s important to define what constitutes typical wear and tear versus the tenant’s duty to cover repairs for damages.

Expenses for Operations

Net leases typically require tenants to pay for all operational expenses associated with the building such as utilities, property taxes and insurance. It is critical to comprehend which costs are included, how they are computed, and how they may change over time. This information enables you to efficiently budget and forecast increases in expenses.

Termination Clauses and Exit Strategy

Life is unpredictable, and business situations can shift. Termination clauses are typically heavily negotiated, and they are never free.  Tenants are typically required to reimburse the landlord for the unamortized cost of tenant improvements and commissions.  Understanding your departure alternatives can rescue you from financial hardship.

Rights to Sublease and Assignment

Businesses may need to sublet or assign their leased space to another party in some instances. Tenants should be aware of the terms and conditions governing subleasing and assignment rights. This is especially critical in the event of a serious downturn in business.

Conclusion

Any tenant hoping to acquire a suitable space for their business should ideally engage an attorney and a commercial real estate broker to help them decipher commercial lease agreements and negotiate the best terms possible. Tenants can make informed decisions that match their business goals and financial capabilities by paying special attention to rent structure, lease duration, renewal options, tenant improvements, responsibility for maintenance, operating expenses, exit plans, and subleasing rights. Consulting with legal and real estate professionals can also be extremely important in ensuring that your lease arrangement is fair, clear, and optimal for your company. Remember that a well-negotiated lease can be a valuable asset to the success of your organization.

At Mobiliti CRE we focus 100% on representing tenants with relocations, expansions, contractions, and subleases throughout Tampa Bay and the entire West Coast of Florida.  We also assist businesses that are looking to purchase office, medical office, flex and industrial Reach out to us for assistance with all of your commercial real estate needs at (813)-300-2227 or email us at pam@mobiliticre.com

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When it comes to signing a commercial lease, it can be easy to get caught up in the excitement of finding the perfect space for your business. After all, the mere idea of having a physical location where you can showcase your products or services can be thrilling. However, before you put pen to paper, it’s essential to understand that signing a lease is a legally binding agreement, and it’s crucial to avoid making common mistakes that can harm your business in the long run. But what are the most common mistakes commercial tenants make? To answer this question, we’ve consulted experts in commercial real estate, and let’s take a look at six mistakes and how you can avoid them.

Avoid the most common mistakes commercial tenants make.

Finding the perfect commercial property for your business can be a daunting task, especially if you don’t have experience in the process. The search for the right location, size, and price can be time-consuming and overwhelming. However, it’s a crucial step in the growth and success of your business.

Unfortunately, the process does not end with finding the perfect space; the next step is signing a lease, which is a legally binding agreement that requires careful consideration. However, knowing what mistakes to avoid during the leasing process can make it much easier and less stressful.

Therefore, this article will explore the common mistakes commercial tenants make when signing a lease and how you can avoid them. By taking the time to understand the lease terms and negotiate a lease that’s right for your business, you’ll be able to set yourself up for success. Now let’s help you find the commercial property of your dreams.

#1 Not Hiring Your Own Broker

One of the first and most common mistakes commercial tenants make when signing a lease is not hiring a commercial real estate broker. Many tenants assume the landlord’s broker is working in their best interest, but this is not the case. A landlord’s broker is working on getting the best deal for the landlord, not the tenant. Therefore, hiring your own broker will ensure that you have someone looking out for your best interests while helping you negotiate the best terms for your lease.

A good broker can help you identify potential red flags and comprehensively analyze the lease terms, including rent and other costs. On top of that, they might be able to help you even after you’ve signed the lease. For instance, they can help you hire movers for your commercial move.  Not all movers are equally qualified, and chances are your experienced real estate broker will be able to recommend the right people for the job.

#2 Not Visiting the Space During Peak Hours

Another very common mistake is not visiting the space during peak hours. It’s easy to fall in love with a space when it’s empty and quiet, but it’s important to see how it functions during the times when you’ll be using it the most. A visit during peak hours will give you a better idea of how busy the elevators and parking lot are and if the space will meet your needs. Additionally, it’s crucial to check the condition of the space, the quality of the construction, noise inside the space during peak building hours, HVAC, elevators, parking, and accessibility in and out of the building.

#3 Not Finding Out Deal Terms from Other Recent Deals in the Building

Many tenants fail to find out the deal terms from other recent deals in the building. However, this could be a crucial piece of information that is typically only available through a well-connected commercial real estate broker. Knowing what other tenants have negotiated in the building can give you an idea of what is possible and what the landlord is willing to offer. Not finding out these terms can result in a lease that is not as favorable as it could be. Therefore, it’s essential to understand that the terms of the lease are negotiable. It’s also crucial to have a good understanding of the market conditions and comparable deals in the area and in your prospective building.

#4 Not Building Flexibility into Lease Terms

Building flexibility into your lease is one of the most important things to consider before signing a lease on any type of commercial space. Not doing so is one of the oversights tenants, especially inexperienced ones, commonly make. Building flexibility into the lease terms includes things like the right of first refusal on adjacent space, the right to sublet, and the right to terminate early.

These are important clauses that can give you the flexibility you need to grow your business or adapt to changes in the market. Neglecting to include these clauses in your lease can limit your options and leave you stuck in a space that no longer meets your needs. Always remember that it’s essential to have a clear understanding of your business needs and objectives and to negotiate a lease that aligns with them.

#5 Not Letting the Landlord Handle the Tenant Improvements

Some tenants fall into the trap of volunteering to handle the tenant improvements themselves. This can be a costly mistake, as it can be difficult to find reliable contractors, and the costs can quickly add up. Unless you are a very large tenant with contacts to reputable and experienced contractors, it’s typically best to let the landlord handle the tenant improvements.

This can help save you time and money, as the landlord is responsible for getting the necessary permits and ensuring that the work is done to code. Additionally, by letting the landlord handle the tenant improvements, you’ll have the peace of mind that the work is being done by a professional and that any issues that arise will be the landlord’s responsibility to resolve.

#6 Not Reading the Fine Print

It’s easy to get caught up in the excitement of finding the perfect space and neglect to read all the details of the lease. However, it’s essential to read the lease thoroughly and make sure you fully understand all the terms and conditions before signing it. Not reading the fine print can result in unexpected costs and headaches down the road.

The Bottom Line

Signing a commercial lease is a big decision and one that should not be taken lightly. By avoiding the most common mistakes commercial tenants make, as we outlined in this article, you can ensure that you are getting the best deal for your business and setting yourself up for success. By taking the time to understand the lease terms, you’ll be able to negotiate a lease that’s right for your business and avoid costly mistakes in the long run. Most importantly, make sure to have an experienced real estate broker on your side.

Guest Post

Contact Pam Pester for all commercial real estate in Tampa Florida, tenant representation throughout the Tampa Bay area and sublease information for businesses and companies.

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Whether you’re planning on opening a new business or you’re thinking about an office move, the location you choose is crucial. Because it can either kill your business or help it thrive. Therefore, you should carefully assess all your options before committing to a specific commercial space. At the same time, you should be prepared to make some compromises. After all, there’s no such thing as the perfect commercial property. Plus, you can’t always afford a space that satisfies all your wants and needs. So, what can you do to ensure the success of your business? Use these tips for choosing the best location for your commercial real estate.

No. 1 Hiring a real estate broker is one of the best tips for choosing the best location for your commercial real estate

If you’re opening a new business, your budget is likely tight. As a result, you might consider that hiring a real estate broker is too big of an investment. But this couldn’t be further from the truth. An experienced real estate broker will help you avoid commercial real estate pitfalls. Therefore, they can help you save money rather than waste it.

Furthermore, due to their knowledge and experience, these professionals can offer you precious advice and information. For instance, they can provide you with information on market prices, commercial real estate availability, new developing areas, and so on. A broker can also save you a lot of time by sifting through the properties and showing you only the ones that match your criteria, not to mention that they have the skills to negotiate a better price for you.  Most importantly,  a tenant or buyer’s real estate brokerage commissions is typically paid by the seller or landlord.   You incur no additional expense by having your own professional representation.

No. 2 Identify your wants and needs

If you’re planning to move your business to a different location, you can base your search on your wants because you have the finances to support that. However, when you’re just starting a business, you might have to limit the search to your needs. Furthermore, by identifying precisely what you are looking for, you’ll be able to narrow down the search significantly.

One of the most important aspects to consider is the size. And this is quite tricky because you have to take into account many factors. These include the number of employees, how much space each of them needs to do their job, the size of the office furniture and necessary equipment, etc. All of these things will enable you to determine how much office space you really need.

No. 3 Determine what you can afford

One of the best tips for choosing the best location for your commercial real estate is to first determine what you can afford. Otherwise, you’ll just waste your time viewing properties that are out of your budget. When you analyze your finances, you have to factor in the monthly operating costs of your business. This includes everything from wages and taxes to utility bills. Once you write it all down, it will be easier to decide if you should rent or buy.

Now, if you’re just starting your business, renting is your best option. Still, you should take into consideration the fact that your rent will likely increase over time. Thus, buying might not be such a bad idea. To make an informed decision, do some research on financing options. Identify the types of loans you’re eligible for. You might even be able to apply for a government loan for start-ups.

No. 4 Look for the competition

To find the best location for your commercial real estate, you have to do some market research. This will enable you to identify the local competition and avoid setting up shop next door. Otherwise, it will be hard to attract clients because they are already loyal to your competitor. Instead, look for an area where the supply is low. Here, it will be much easier for you to create a client base and get recognition.

No. 5 Factor in foot traffic

This depends on the type of business you’ll be running. Foot traffic is essential if you want to open a shop, a gym, or a hair salon. Without this, your business won’t survive. So, look for areas that include multiple stores, but remember to avoid the competition. It would be best if you also visited the site several times throughout the week at various times of the day. This will enable you to determine the actual level of foot traffic.

At the same time, some types of businesses require a more remote location with low foot traffic. For example, this applies to rehab centers. Patients need a quiet and peaceful place to undergo treatment. That’s why the addiction treatment experts from brightfuturestreatment.com advise you to look for commercial real estate in the suburbs or a secluded area near a forest.

No. 6 Don’t overlook the appearance

First impressions are crucial. This doesn’t only apply to people but also to commercial real estate. If the property is old and deteriorated, it will scare off potential customers. Moreover, if the property requires extensive repairs and renovations, this can end up draining your bank accounts. So, try to avoid fixer-uppers if money is tight. Instead, look for a lovely space that feels welcoming.

Of course, even commercial properties that are in good condition might still require some work. Therefore, you should factor in these costs before deciding to rent or buy. Furthermore, it would help if you researched local heritage and zoning rules and regulations because you might need to obtain specific permits, even for minor changes. Not to mention that your requests might be rejected. So, it’s essential to be well-informed beforehand.

Final thoughts

Finding the right location is vital for the success of your business. The problem is that there are lots of factors to consider. But these tips for choosing the best location for your commercial real estate will help. Still, you shouldn’t hesitate to ask for help. A good real estate agent can make the entire process much easier. They can also save you a lot of time and money. Still, if you’re determined to do it on your own, make sure you don’t make any rash decisions. Take your time to assess all your options and carefully inspect each property before deciding on the best one.

At Mobiliti CRE we focus 100% on representing tenants with relocations, expansions, contractions, and subleases throughout Tampa Bay and the entire West Coast of Florida.  We also assist businesses that are looking to purchase office, medical office, flex and industrial Reach out to us for assistance with all of your commercial real estate needs at (813)-300-2227 or email us at pam@mobiliticre.com

Set up a Consultation Now

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Important Things to Consider Before Leasing a Building

The History of Any Businesses that Have Been There

One of the most important pieces of research that many commercial tenants forget to research is how other businesses have performed in the building. Were they similar to your own? Why did they leave? It is often easy to look this up by checking the address. If you feel comfortable doing it, you can even contact the previous tenant to get their input.

Keep in mind that in 2020 and 2021 many businesses had to shut their doors due to the lack of business, so this should be considered before deciding the building itself is to blame.

Whether it Has Use-Specific Rooms

There are some use-specific rooms that you’ll need just to keep running. For some businesses, this might mean a mail room with new mailboxes. For others, it could mean updated break rooms that can leave your employees comfortable and eager to get back to work when their break ends.

Think about what rooms you’ll need to keep your business running and whether this building offers options for that, even if they’re not as exact as you’d like.

If The Exterior Is Alluring Enough

Does the exterior have the charm or the looks you’d want to represent your company? You might be able to talk your landlord into using a brick-cladding system since the market is moving in your favor now.

While looking at the exterior, ask if the maintenance of it is going to be yours or the landlord’s responsibility. Although you can find countless companies to maintain it, it’s an important part of your budget you’ll need to consider.

How Comfortable is the Interior for Focus?

If you’re trying to keep your employees in focus and work-mode, it can be hard if there’s a bowling rink next door that blares music 24/7. Walk through the building during the time you would usually be operational, and pay attention to how noisy it is.  Some of this can be stopped by acoustic hexagon panels placed in the right areas to absorb some of the sounds, but if it’s out of control, you may want to consider a different location.

How Well Does the HVAC System Works What Does it Cost to Operate?

One of the biggest complaints employees have about the offices they work in is the temperature. Is it going to be comfortable for them while they’re working? You don’t want to be the type of office where every employee has a work sweater.

Most office buildings have an extra charge for after hours use of heating and cooling.  Be sure to ask what that charge is.  If you will operate outside of normal building hours, you may need to negotiate some type of fixed charge.

Is There Room to Expand?

An important part of any commercial space that’s easy to overlook is ensuring that there’s enough room for your company to grow. If your lease is for five years, will this building be able to handle how you expect to grow through that time? Try to have a ten-year projection for your company and think about how this building will fit into that plan.

Who’s Responsible for Maintenance and Renovations?

If the lights go out on an entire hallway for no reason, who’s in control of repairing them? Read your lease carefully and make sure you know what you need to be able to do and what your landlord will need to handle. How fast will they be expected to have someone repair these issues?

It is essential to know what to expect, just in case.

Is the Building Zoned for Your Use?

Although your landlord should alert you to any zoning laws in your area, it’s important to stop and do the research yourself as well. The last thing you want to deal with is signing a lease and then finding out that a major part of your operations is in violation of local zoning laws and that you’re not allowed to operate in that building at all. This could lead to legal issues and at a minimum, a lot of wasted time and effort that is easily avoidable.

You Deserve the Commercial Building of Your Company’s Dreams

Whether this is your first commercial lease, or you want to make sure you do it right after previous mistakes, it’s important to stop and consider everything before you sign that lease. Keep these ideas in mind while building hunting.

Guest Post: Sam Willis is a freelance writer that loves sharing his knowledge and expertise on commercial real estate. He lives in Atlanta, Georgia where he enjoys spending time with his wife and researching real estate trends in his free time. Sam’s work as a freelance writer can be found on Building Product Advisor, a new construction industry resource launching in the New Year.

For more information on lease renewals, contact us today. At Mobiliti CRE we focus 100% on representing tenants with relocations, expansions, contractions, and subleases throughout Tampa Bay and the entire West Coast of Florida.  We also assist businesses that are looking to purchase office, medical office, flex and industrial space.  Reach out to us for assistance with all of your commercial real estate needs at (813)-300-2227 or email us at pam@mobiliticre.com

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As a commercial tenant, you have a lot to worry about when it comes to protecting yourself and your business. Not only do you have to worry about the physical space you are renting, but you also have to think about your rights as a tenant, potential legal issues, and much more. Protecting yourself and your business from potential problems, liabilities, and disputes with your landlord is important. Finding yourself in a situation that you are unprepared for can be extremely stressful for you and your employees. In order to avoid that, here are six tips for protecting yourself as a commercial tenant.

1.      Read and understand your lease agreement

One of the most important things you can do as a commercial tenant is to thoroughly understand your lease agreement. Before signing, make sure you read and understand all the terms and conditions. This document outlines the terms of your rental agreement, including the length of the lease, the amount of rent you will pay, and any responsibilities you have as a tenant. If there is anything you don’t understand, don’t be afraid to ask questions. If there are any clauses or provisions that you don’t agree with, discuss them with your landlord or a lawyer before signing. This will help you avoid any surprises down the road and ensure that you know your rights and responsibilities as a tenant.

2.      Document the condition of the property and conduct a property inspection

Before moving into your commercial space, take photos or videos of the property to document its condition. This will help protect you if your landlord later claims that you caused damage to the property.

In addition to that, be sure to conduct a thorough inspection of the property. Look for any potential safety hazards or issues that need to be addressed. This will help you avoid potential issues in the future and give you peace of mind.

Pro tip: Get everything in writing

When it comes to your rental agreement, it’s always best to get everything in writing. This includes any changes or amendments to the original lease agreement, as well as any agreements you make with your landlord about repairs or maintenance. Getting everything in writing will provide clear evidence of the terms of your agreement and will protect you in case of any disputes.

3.      Keep good records of all communication

As a commercial tenant, it’s important to keep good records of all communications with your landlord and any repairs or maintenance that have been done to the property. The records include emails, letters, and phone calls. This will not only help you stay organized and keep track of any promises or agreements made between you and your landlord, but it will also provide evidence in case there are any disputes or legal issues down the road.

Make sure to keep copies of all correspondence, receipts for repairs, and any other documents related to your tenancy.

4.      Know your rights as a tenant

As a commercial tenant, you have certain rights that are protected by law. These rights vary depending on where you live, so it’s important to familiarize yourself with the specific laws in your area. Some common tenant rights include the right to a safe and habitable living space, the right to privacy, and the right to be free from unreasonable eviction. When protecting yourself as a commercial tenant, you always need to be one step ahead to avoid putting yourself in an unfavorable position.

Moving your business

You might be relocating your business locally in Tampa—ensure that you follow all the protocols and do not damage the property in the process. Instead of making yourself vulnerable to issues with your landlord, an expert team can handle this. Hiring movers for your commercial move is the safest way to go about it. You will be dealing with heavy furniture that you may not be equipped to move on your own. A commercial move also includes relocating equipment such as printers or other sensitive machinery that you do not want to be damaged. A team of professionals has years of experience, so why not take advantage of that?

5.      Keep the property secure and in good condition

As a commercial tenant, you are responsible for maintaining the property in good condition. This means taking care of any necessary repairs or maintenance and keeping the space clean and tidy. By taking good care of the property, you can protect yourself from any potential legal issues or disputes with your landlord.

In addition to that, be sure to keep your space secure by implementing measures such as locking doors, installing security cameras, and maintaining good lighting. This will help protect your business from potential theft or vandalism.

Pro tip: Purchase tenant insurance

Tenant insurance can provide protection for your business assets and liabilities in the event of loss or damage. This can include coverage for things like fire, theft, and liability for accidents that occur on the property.

6.      Have a plan for disputes

Even with the best intentions, disputes between landlords and tenants can arise. Protecting yourself as a commercial tenant requires understanding your rights, staying organized, and planning for potential disputes. It’s important to have a plan in place for how you will handle these situations if they do happen.This may include seeking legal advice, mediation, or even contacting a tenant’s rights organization for assistance.

Pro tip: Pay your rent on time

Make sure to pay your rent on time each month to avoid late fees and potential legal action from your landlord. You can set up a payment plan so that it is automatically taken care of each month. One less thing to worry about!

Final words on protecting yourself as a commercial tenant

Following these tips on protecting yourself as a commercial tenant can keep you and your business safe and ensure a successful tenancy. By being proactive and taking the necessary precautions, you can avoid potential issues and ensure the success of your business. If you have any legal concerns or disputes with your landlord, consider hiring a lawyer to help protect your rights as a commercial tenant.

Guest Post 

For more information on lease renewals, contact us today. At Mobiliti CRE we focus 100% on representing tenants with relocations, expansions, contractions, and subleases throughout Tampa Bay and the entire West Coast of Florida.  We also assist businesses that are looking to purchase office, medical office, flex and industrial space.  Reach out to us for assistance with all of your commercial real estate needs at (813)-300-2227 or email us at pam@mobiliticre.com

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• 11 Tips for a Successful Real Estate Tour
  
• Is a Sublease Right For You?
• How to Prepare for an Office Move
• Cost Saving Strategies to Reduce Rental Expenses
• Determining How Much Office Space You Need
• How to Avoid Commercial Real Estate Pitfalls
  
• What is a Letter of Intent and Why Are They Useful?
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The post 6 Tips for Protecting Yourself as a Commercial Tenant appeared first on Mobiliti CRE.

No one wants to waste time and money on a commercial real estate transaction that the parties will never complete. A well-drafted, nonbinding letter of intent (LOI) can be a valuable first step in determining whether there is a deal to be made before too much expense has been incurred.

What is a Letter of Intent (LOI)?

A letter of intent is a letter from one party to the other, countersigned by the addressee. Unless it clearly states otherwise, it may constitute a binding agreement despite its informal appearance.

The purpose of an LOI is to outline the key terms of an existing or proposed agreement such as a commercial real estate lease or real estate purchase agreement. The use of an LOI implies that, while the parties may intend to reach an agreement in the future, they have not done so yet.

Despite any implication of the document’s title, every LOI should expressly provide whether and to what extent the parties intend it to be binding. If your LOI doesn’t do that, then you are asking for trouble.

Why use an LOI?

LOIs can save both time and money in connection with complex transactions such as commercial real estate leases and real estate purchase and sale agreements where the documentation will be extensive. Reaching agreement on all key terms to the proposed transaction before generating massive amounts of paperwork is a wise and worthwhile step. The LOI can bring to the surface major issues that must be dealt with, and if there is an insurmountable obstacle, it is better to discover it sooner rather than later.

Non-lawyer negotiators who are provided with a good standardized form of LOI may reach an agreement on the business and economic aspects even when the transaction has legal ramifications. As long as the LOI is clearly nonbinding, the legal review may wait until the preparation of the final documents.

Of course, there are exceptions when the use of an LOI may be inappropriate.  In transactions involving significant tax or regulatory matters, or in any case where litigation is pending or threatened, the key negotiators may want to have their lawyers present from the beginning. On the other hand, the LOI is a waste of time if the transaction is routine and simple, especially if one party can dictate the terms.

Related: What’s the difference between triple net and gross lease?

What terms should be included? 

Each Letter of Intent varies with the particular transaction, but the following terms are common in most of them.

• Correctly identify the parties and provide their contact information.
• Set out key terms already agreed to and any provisions still to be negotiated.
• Specify a time frame. If the parties are unable to achieve a definitive agreement by the LOI’s expiration date, one party should confirm by written notice to the other that negotiations have ceased and that the Letter of Intent has expired.
• Expressly state that the LOI is nonbinding and that neither party has any obligation to enter into any agreement not completely satisfactory to it. If there are exceptions to the nonbinding nature of the LOI, it should carefully identify those provisions, such as confidentiality clauses, exclusivity provisions, and parties bear their own expenses. In addition, the LOI should provide that any binding provisions will survive termination.
• Include that it will be superseded by the signed definitive agreement.

The proper use of carefully considered LOIs in appropriate transactions will reduce your risk of failure, increase your likelihood of success, and save time and money.

At Mobiliti CRE we focus 100% on representing tenants with office relocations, expansions, contractions, and subleases throughout Tampa Bay and the entire West Coast of Florida.  We also assist businesses that are looking to purchase office, medical office, industrial, and retail space.  Reach out to us for assistance with all of your Tampa Bay commercial real estate needs at (813)-300-2227 or email us at pam@mobiliticre.com

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More Tenant Related Information

• Tampa Bay Commercial Office Market Snapshot
• How to Maximize Tenant Renewals
• 11 Tips for a Successful Real Estate Tour
• Tips for Renegotiating Rent Due to COVID-19
• Is a Sublease Right For You?
• How to Prepare for an Office Move
• Cost Saving Strategies to Reduce Rental Expenses
• How is my office building growing when there’s been no construction?
• Determining How Much Office Space You Need
• How to Sell a Tenant-Occupied Property
• How to Avoid Commercial Real Estate Pitfalls

The post What is a Letter of intent and Why Are They Useful? appeared first on Mobiliti CRE.

When leasing commercial real estate, you need to be certain that you understand how “rent” is quoted so that you can compare rates between leases.  Your decision to enter into a lease without understanding the significance of the type of lease may have a drastic financial impact on your company.  The three most common types of commercial leases are the full-service lease, triple net lease, and the modified gross lease.  There are variations of these but most leases are based on one of these types. 

Full-Service Lease

The full-service lease covers all of the basic expenses that the landlord would normally incur including taxes, insurance, utilities, trash, lawn care, janitorial services, repairs, and maintenance, etc.  The landlord quotes a rate that includes paying the taxes, insurance utilities, and common area maintenance (CAM).  In order to protect itself from escalating costs, the landlord will include either a base year or an expense stop.  To understand a full-service lease, it is crucial to understand these concepts

In a base year approach, the landlord represents that the quoted rate will include all of the costs described in the previous paragraph that were spent in a given year.  The year could be last year, this year or next year.  The base year chosen often depends on the time of year the lease is signed.  For example, a lease signed in January 2021 will have a 2021 base year while a lease signed in November or December will typically have a 2022 base year.  Note that it is usually to the landlord’s advantage to use the earliest year possible and to the tenant’s advantage to use the latest year possible.  Full-service leases with a base year typically provide for an annual escalation in operating expenses (frequently 3%).  The downside of this escalation is that the annual base rent will increase regardless of any real fluctuations in the operating expenses. 

An expense stop is similar to a base year except that instead of using the actual number for a given year the landlord simply quotes an amount.  If the actual expenses are higher than the amount quoted, the tenant will have to pay his/her share of the increase.  Tenants should ask for the previous years’ actual amount and all projected expenses to try and ensure that the expense stop is in line with expected costs.  If it is too low there will be significant overages to pay.  Most office leases are full service.   

Triple Net Lease

The triple net (NNN) lease is almost the reverse of the full-service lease.  There is a quoted base rent but the tenant is responsible for all of the costs incurred with the operation of the space.  The tenant pays the taxes, insurance premiums, utilities, etc.  The tenant has all the responsibilities of ownership with none of the advantages.  This type of lease is frequently used for single-tenant properties and, retail and industrial properties.  In multi-tenant properties, the landlord pays for these expenses as they occur but each tenant pays in advance for his/her pro-rata share of the expenses.  The landlord estimates the cost of taxes, insurance, and common area maintenance (CAM) charges at the beginning of the year and will bill the tenant for 1/12th of these estimated charges with the monthly rent.  At the end of each year, the landlord will compare the actual expenses with the estimated expenses.  If the landlord has spent more than estimated, the tenant will receive a bill for the difference.  In a triple net lease, the quoted rate does not include the cost of taxes, insurance or CAM.   

In a triple net lease, the tenant is often responsible for major mechanical, electrical, and plumbing expenses that occur within the tenant’s space.  If a pipe breaks within your space, you the tenant will incur the cost to fix it.   In most cases, the tenant is responsible for maintaining the HVAC too.   

Gross Lease

A modified gross (MG) lease (sometimes referred to as “industrial gross”) is similar to a gross lease in that the rent is requested in one lump sum which can include any or all of the “nets” property taxes, insurance, and CAM.  Utilities and janitorial services are typically excluded from the rent and paid by the tenant.  The “nets” included in the base rate vary by region and by the landlord.  It’s always important to ask exactly what is included in the modified gross rent. 

When evaluating options for space it is important to compare the different lease options with an eye towards all expenses, not just the base rental rates.  Market forces will tend to even out rental rates for comparable properties regardless of the type of lease.     

The most important rule of commercial leasing is for tenants to read their leases carefully, and to clarify exactly which expenses they are responsible for.  Depending on the market (booming or recession) and the tenant’s credit, caps may be negotiated and expenses shifted to the landlord. 

At Mobiliti CRE we focus 100% on representing tenants with office relocations, expansions, contractions, and subleases throughout Tampa Bay and the entire West Coast of Florida.  We also assist businesses that are looking to purchase office, medical office, industrial, and retail space.  Reach out to us for assistance with all of your Tampa Bay commercial real estate needs at (813)-300-2227 or email us at pam@mobiliticre.com

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More Tenant Related Information

• Tampa Bay Commercial Office Market Snapshot
• How to Maximize Tenant Renewals
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• Tips for Renegotiating Rent Due to COVID-19
• Is a Sublease Right For You?
• Secrets to Finding Great Investment Properties
• How to Prepare for an Office Move
• Cost Saving Strategies to Reduce Rental Expenses
• How is my office building growing when there’s been no construction?
• Determining How Much Office Space You Need
• How to Avoid Commercial Real Estate Pitfalls

The post What is the Difference between a Triple Net and a Gross Lease? appeared first on Mobiliti CRE.

In October 2017 BOMA released a revised version of the BOMA standard for measuring rentable square feet for both existing and new office buildings.  The BOMA standards are important because they determine the way landlords can pass on a building’s common area operating costs to tenants.

Two Changed to BOMA

The 2017 BOMA Office Standard has two significant changes that negatively impact tenants. The first change is that balconies, covered galleries, and finished rooftop terraces that are for the exclusive use of a tenant are now included in the rentable square footage calculation.  Tenants who have balconies, covered galleries or rooftop terraces should pay careful attention the BOMA language in the lease when they renew to ensure that the landlord doesn’t try to insert the new standard into the lease thereby increasing the rentable square footage.  For new leases, we recommend inserting a clause in the lease that states that the rentable square footage of the premises will not increase at any time during the initial lease term or any renewals due to changes in BOMA standards or remeasurement except for actual expansions.

The second change to the 2017 standards is that common areas of the building including stairwells and elevator shafts at the lowest level of the building are now included in the rentable square footage. These spaces are referred to as “vertical penetrations.” They were previously excluded from rentable square footage but are now included with the reasoning that the lowest level is a public space and should be rented.

It is not uncommon for office buildings to be re-measured.  This usually happens before a sale of a property, after an acquisition or sometimes to reposition the property within the market.  While the physical size of properties remains the same, they have been “growing” due to remeasurement for years.  Changing measurement standards are one way for building owners to increase income from a property.  Landlords are not obligated to use the 2017 Standard but it is in their interest to do so.  From a tenant’s perspective, it is important to know which BOMA Standard a landlord using be it 1996, 2010 or 2017 and to ensure that the measurement standard selected is consistently applied.  For larger leases, if the tenant or tenant broker suspects the measurement may be incorrect, it is in the tenant’s best interest to have the space re-measured prior to signing a lease.

At Mobiliti CRE we focus 100% on representing tenants with office relocations, expansions, contractions, and subleases throughout Tampa Bay and the entire West Coast of Florida.  We also assist businesses that are looking to purchase office, medical office, industrial, and retail space.  Reach out to us for assistance with all of your Tampa Bay commercial real estate needs at (813)-300-2227 or email us at pam@mobiliticre.com

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More Tenant Related Information

• Tampa Bay Commercial Office Market Snapshot
• How to Maximize Tenant Renewals
• 11 Tips for a Successful Real Estate Tour
• Tips for Renegotiating Rent Due to COVID-19
• Is a Sublease Right For You?
• How to Prepare for an Office Move
• Cost Saving Strategies to Reduce Rental Expenses
• Determining How Much Office Space You Need

The post How is My Office Building Growing When There Has Been No Construction? appeared first on Mobiliti CRE.