Signing a new commercial lease is an exciting yet stressful time for any business. You’ve probably inspected a few different buildings, done some research on what makes the best fit for your organisation, and finally settled on a space. But now, it’s time to enter into negotiations around your first commercial lease.
Unfortunately, there are a lot of components to a commercial lease and it’s not easy to get your head around all of them. This is why it’s so important to have a commercial tenant advisor on your side, to help negotiate and clarify the different parts of your lease agreement.
At Niche Tenant Advisory, we help businesses all over the city, to negotiate new commercial leases, as well as re-negotiating existing lease agreements. Through our experience and expertise, we know exactly what you need to know when considering your first commercial lease.
Know the building
Entering into a commercial lease without thoroughly inspecting your building is simply setting yourself up for disaster. A professional condition report will put you in the best possible position, ensuring that you are fully aware of any shortcomings or existing problems with your new office space.
At Niche Tenant Advisory, we’re partnered with Condition Reports Online. By obtaining a condition report, you’ll be able to mitigate your risk, save money by negotiating around any shortcomings with your new space and save money that may be spent on costly and unnecessary repairs in the future.
For example, imagine that your building has existing damage to fixtures and fittings, such as scratches on the floors, walls and ceilings. Perhaps you missed the damage when you first inspected the building – it happens! But then you move into the space and realise that the damage is there, and down the track, you’ll be lumped with the repair bill. However, this dilemma can be avoided entirely by having a professional condition report conducted before you sign any documents.
Know your area
It’s really important to not only do a thorough review of your building but also to understand the area that your building resides in. Before committing to a contract or even discussing rent, getting a good understanding of the suburb and average pricing will ensure that you don’t end up paying too much.
A tenant advisor will know the market inside and out, thereby knowing how much you should probably pay for a certain type of space in a particular area. Tapping into our expertise to better understand the market in your area is a must, particularly when there are so many factors in a precinct that can influence the success of your business.
Commercial leases can be long documents
Your commercial tenancy agreement could be roughly 40-50 pages of dense jargon and if you’ve not been in this position before, it can be tough to make sense of it. Trying to read through each component of your commercial lease alone, without professional advice, can lead to you missing vital information.
At Niche Tenant Advisory, we know exactly how to read through a lease in the most effective and efficient way. We know what to look for, how to read through the unfamiliar terminology and put you in the best position possible when negotiating your terms.
You need to be aware of your makegood clause
The makegood clause is one of the most important yet often overlooked parts of any commercial lease. Misunderstand the makegood clause at your peril… because if you do, it will come back to bite you when you vacate your office space!
The makegood clause determines that when your lease ends, you will need to either strip-out your office and return it to its existing condition, or settle on a lump sum payment with your landlord. Often, when tenants neglect to understand this clause, they are fleeced by greedy landlords and have to pay a premium.
We’ll help you negotiate hard before you sign any documents, meaning you won’t be caught out by this clause when your lease ends.
Understand rent reviews
Rent reviews are a normal part of any Sydney commercial lease agreement. There should be a stipulation as to how often these rental reviews happen, or if there are incremental increases each year. We can help you negotiate these terms, to ensure you end up with fair terms that don’t see you paying an arm and a leg in annual increases.
You can negotiate almost anything
The great thing about commercial tenancy agreements is that you can negotiate almost any of the clauses that appear in the lease. Whether that be rent, makegood obligations, increases or something else, we can help you get the best terms possible. Negotiating with a professional tenant advisor in your corner is a must.
To discuss your new Sydney commercial lease with Niche Tenant Advisory, get in touch with us today.
