chicago office space listings

How Financial Analysis Plays a Part in Office Lease Transactions

by Uncategorized

chicago office space listingsCommercial office space leasing consideration is a bit more in-depth than renting a residential property, for example. When leasing a home, apartment or condo, you know how much the rent costs and whether or not you will be able to afford it. For commercial office space leasing, the decision-making process is a bit more time consuming. In order to ensure that you are renewing your lease at the right location at the right cost or deciding to move your office space to a new locale to save money, you want to complete a full financial analysis to make sure that the leasing decision you make is the right one.

What a Financial Analysis Accomplishes

A financial analysis is the answer to determining what your overall cost will be to lease a commercial office space. Far from simply considering annual lease amount, there are many other factors to review in order to ascertain that the lease is a financially responsible move for you and your company to make. In addition to looking at the base rental price, you must consider factors such as increases in operating expenses, caps on operating expenses, reduced rent periods, contributions by the landlord, parking fees and more. By looking into all of these added factors, you can make the proper determination as to whether renewing your lease or moving elsewhere is the right decision to make.

How to Perform a Complete Financial Analysis

When starting the financial analysis process, you’re going to want a little help with the calculations. Fortunately, there are programs for just this type of analysis. Some of the popular financial analysis help comes in the form of ProCalc, LeaseMatrix and more. By using these programs, you can get a correct number, as well as get the job done with ease. When performing a financial analysis, you’ll be considering the various features listed above, such as base rental payments, operating expenses and all other costs and considerations which will provide you with a final determination as to whether or not your leasing arrangement will be of benefit to you and your company.

What to Do with the Financial Analysis Results

When the tabulations are complete, the final step is knowing what to do with the results. You want to look at the bottom line and determine if this number will fit within your budget or not. It will be helpful in making the decision whether to stay and renew your commercial office space lease or lease an office at a new location.

If you have a tenant representative, your decision will be made much more easily. This advisor will go through the numbers with you and help you to decide which leasing option will benefit you the best. Making the right decision is a matter of going through the financial analysis, step-by-step, and figuring out whether it pays to stay in your current office space and renew your lease or move on to a new location which will be more cost-effective and better for your company overall.

Office Space: Make The Tenant Improvement Allowance Work For You

by with No Comment Uncategorized

Many office space leases will be a good fit for companies yet there may be some improvements which have to be done in order to make the premises a perfect fit for the tenant. For this reason, tenant improvement allowances are often included within the commercial office space lease. These allowances come in different forms. Two of the most common forms include a turn-key build-out and a fixed rate allowance.

Difference Between a Turn-Key Build-Out and Fixed Rate Allowance

With a turn-key build-out tenant improvement allowance, the landlord will pay all costs to get your leased premises situated the way that you want them to be. On the other hand, a fixed rate allowance is when the landlord will give you a set amount of funds and anything over that amount will need to be paid by you, out-of-pocket. Both provide tenant improvements for the company owner leasing the space, however, both are quite different in nature.

With the turn-key build-out, you will be ensured that the money is paid for your improvements, however, you may not have the last word regarding what is done, how it is completed and when it is completed by. The landlord will have more control over the work. With the fixed rate allowance, you will have more control over what improvements are made and when but you may find yourself facing some out-of-pocket costs in the end if the project costs more than what was allotted to you under the lease.

How to Benefit from the Tenant Allowance

In order to benefit most from the tenant allowance, consider what improvements you plan on making to the leased premises. If you only plan on completing simple repairs and construction, a turn-key build-out might work fine for you because you won’t need too much control over simple tenant improvements and you will be ensured that the landlord pays for everything which has to be done. If your tenant improvements are more voluminous in nature and you can figure out exactly how much money you need to get the job done and want to ensure that it’s done according to your specifications and schedule, a fixed rate allowance might be best.

Keep in mind that you may always negotiate when it comes to tenant improvement allowances. You can choose a hybrid form of the two options listed above to have the type of tenant improvement allowance which will work in your favor. You may ask the landlord to provide for a turn-key build-out allowance but request that you be able to choose a project manager to oversee the entire project and have this individual report to you. Should you prefer the fixed rate allowance, ask if the landlord would be willing to pay for any extra money needed during the process, which couldn’t be accounted for until the project was underway. Just be sure to have these terms listed in the lease, otherwise, they won’t be valid terms.

Your tenant representative will guide you in the tenant improvement allowance process and go through all of the details with you to ensure that you are making the right choice with regard to this lease term.

Why You Need A Renewal Option

by Uncategorized

As a prospective tenant in a commercial office space lease, you not only want to consider your current lease term but the prospect of a future lease term as well. The best time to secure your interest in a future lease term is when you sign your new lease for the current lease term. A renewal option clause in the commercial office space lease will secure your future lease option and provide you with the opportunity to renew your lease term upon its expiration, provided you give the requisite notice. The following will provide some reasons to negotiate a renewal option clause for the lease you are about to sign for your current lease term.

Inclusion of a Renewal Option Clause Secures Your Future Tenancy

Although you may not know whether you’ll want to stay in your current lease location after your initial lease term expires, the time to put the renewal option clause into your lease is prior to signing it. It’s so important to reserve the right to renew your lease when the time comes. This is what will allow you to stay in your current location for another term, should you desire to do so. Your future tenancy is not secure if you don’t have a clause within the current lease to ensure this is so.

The Renewal Clause Is an Option Not a Requirement for the Tenant

Some office space tenants may be hesitant to have a renewal option clause in their lease as they think it requires them to renew the lease upon expiration of the current lease term but this is not the case. The renewal clause provides an option to commercial office space tenants and does not require them to renew the lease in the future. This is an extreme benefit for the commercial tenant, more so than for the landlord because so long as this clause is in the lease, the landlord has no other option but to allow the tenant to renew if they choose to do so. That is, as long as the tenant is paying their rent on time, adhering to other lease terms/requirements, etc. In other words, so long as the tenant is a “good tenant” overall.

Renewal Option Must Be in the Lease to Be Applicable

If you want to reserve the right to renew your lease down the road, the renewal option clause must be in your current lease to positively secure this option. The terms which govern your tenancy are included within the lease. Since the renewal option is a lease term, this also must be in the lease in order to effectively be used in the future. This renewal option should state the terms of the renewal lease and let you know what you are signing up for should you decide to renew your current lease.

It’s vital to have a renewal option within the lease. This lease term will allow you to renew should you choose to do so in the future and will work to benefit you, the tenant, in the long run.chicago office space listings

Chicago Office Sublease

Commercial Real Estate in Chicago: Considering a Coffee Shop?

by Uncategorized

Chicago Office Sublease

Are you considering turning your love for coffee into a reality? In today’s world, 63% of young people want to start their own business. So, why not go for it? It is quite the intimidating process; however, it is achievable. Sure, you have to develop a business plan and the delicious coffee you’re going to sell, but do you know what the most important is? The answer: the space. In order to run any successful business, you’re going to need the perfect commercial real estate space to operate. One of the fastest growing industries in Chicago is small coffee cafes. In order to survive in this fast paced industry, there are a number of things that you must look at and consider:

1. Is the space big enough the serve the goal of the business: Can you see your business growing and flourishing in the environment? It is always important to determine if the potential space can contain all of your equipment, products, and projected clientele.
2. Is the space affordable: Are you going to be able to afford the space? Think about whether or not the space will make or break your business. You want to have the perfect balance between spend and return on investment.
3. Is the space owned by someone you can see yourself doing business with: Is the landlord fair and ethical? Always make sure you can have a working professional relationship with the person that owns the potential space.
4. Is the space in a part of the city that will draw in potential customers: Is the space located in a hip or heavily populated area of the city? You always want to make sure you target a good audience of people.
5. Is the space under a fair, negotiable lease: Is the lease something that makes sense to sign? Is it legal and fair? Always pay attention to the detail in the lease.

There are many notions to think about when you’re planning to open your own business, and it is vital to ask all the right questions when considering a space for your business. You may even consider looking for help when you’re searching for commercial real estate. Don’t be afraid to make the process easier.

Hoffman Estates Office Space

Questions to Ask Your Landlord before You Lease a Property

by Uncategorized

 

Moving into any new property—especially an office—is stressful business. A thousand questions might flood your mind, but it is important to keep calm and cool throughout the process of looking for space to utilize for your professional purposes. You want to make sure that you’ve found the perfect place for you. You want to know for a fact that you’re getting the best deal possible. You want to ensure that the landlord is a person that you can actually do business with. These are absolutely normal thoughts and concerns to have; however, right about you’re about to sign that lease you want to be certain that you’re making the best decision for your needs and goals. So, right before you make that final decision make sure to ask the landlord some of the following 10 hard-hitting questions:

1) Is the lease short or long-term?

2) Do you pro-rate rent?

Hoffman Estates Office Space

3) Where and how is rent paid each month?

4) Are there additional fees on top of the rent?

5) Is there property management on site?

6) Are there regular inspections of the property?

7) Are there rules against personalizing your office?

8) If there is a deposit, is it refundable?

9) Is there any maintenance work that I am responsible for?

10) Are there any improvements or construction planned for the building in the near future?

This is one of the most important steps in finding the perfect location for you. If you require additional service in finding office space in the Chicago area, consider contacting a tenant representation service to help you throughout the process.