Chicago office space rental

Subordination & Non-Disturbance Agreements in Office Leases

Chicago office space rentalWhen an office tenant signs their commercial office space lease, it’s only natural to assume that the tenant will have an undisturbed tenancy and complete access to the premises as noted in the lease. This is often the case, however, there comes a time on occasion when a tenancy is disturbed for one reason or another. This can happen when the property has a mortgage on it and there is a lender involved. Should the property owner/landlord default on their mortgage, the lender may have a right to interject in some form. This is where a subordination and non-disturbance agreement comes into play.

What Is a Subordination and Non-Disturbance Agreement?

The subordination and non-disturbance agreement is one which will be signed at the time of the lease signing. Basically, this agreement states that should the landlord default on their loan, the rights of the tenant are subordinate to the lender. The non-disturbance portion of the agreement safeguards the tenant by stating that, even though the lender forecloses on a property, the tenancy and tenant’s rights under the lease will go undisturbed. This agreement acts as a way to cover any issues which could possibly arise in the future with a property that is in some way involved with a lender.

Is This Form of Agreement Common?

In commercial office space leasing, you will often find a subordination and non-disturbance agreement present within the paperwork. With real estate transactions such as this one, it’s important to consider all possible instances which could occur in the future and ensure that there is an agreed-upon solution stated in writing should such an instance occur. Office space tenants should not be hesitant to sign a subordination and non-disturbance agreement as it will safeguard their tenancy in the future and ensure that their lease term will go undisturbed throughout the length thereof.

The Importance of Reading the Agreement Thoroughly and Ensuring It’s Part of the Lease Agreement

When presented with the subordination and non-disturbance agreement, office space tenants should read through the agreement thoroughly and make sure that their rights under the agreement are known. A tenant representative can help the office space tenant to understand this document and explain in further detail the different components of it. With an agreement of this type as part of the lease arrangement, the tenant knows exactly where they stand should the lender choose to foreclose. It’s also readily agreed to by the lender, as the subordination portion benefits their rights to the property, especially when there is a tenant in possession of the property under the lease term.

The subordination and non-disturbance agreement is just one more necessary piece of the leasing puzzle which helps to outline the rights of the parties involved in the real estate transaction. It will not be put into the motion in most instances, however, it is vital to have this type of strategy in place should a loan default and foreclosure become an issue during the life of the lease term. Tenants should be sure to inquire with their tenant representative about any questions they may have related to this type of agreement prior to signing it.

Chicago office space rental

3 “Do’s” of Commercial Real Estate

Chicago office space rentalWhen considering purchasing or renting commercial real estate, there are a few do’s and don’ts. Here are a few “do’s” of the commercial real estate market and how to avoid some pit falls!

  1. Experts will Be Life Savers – Consider all the experts that you can find as fantastic resources to get the best possible value for the property. Experts can determine all the answers to the who, what, when, where and why of commercial real estate. A tenant advisor can also provide insight into the current state of the market and when it would be ideal to move in on a property.
  2. Take a Tour – When considering a property, even a rental property, take a tour of the property. You never want to be unpleasantly surprised with your rental office space. Even though you can trust your broker, advisor, etc., you can still look into how the property will fit you and the goals you have for your team.
  3. Strategize – Knowing your business strategy can also help to decide your best options when it comes to a real estate venture. Looking at what your business’s needs and wants are now, and also what they will be in the length of time that the lease in binding. Consider all aspects from growth to expectations that will be affected by you choice in real estate.

If you are looking for Chicago office space rentals, check out TenantAdvisors.com to get the latest updates on properties in the area!

Chicago commercial tenant advisors

Do I Need Tenant Representation?

Chicago commercial tenant advisorsA commonly asked question when looking into commercial leasing or renting is if you need tenant representation. Here are a few ways that tenant advisors can help your choices so you can decide if they can help you and your business. There are three main functions that tenant advisors can help with.

  1. Strategy Development – When looking to either move your business or to renew your lease it is important to consider what your strategic plan is for the space. Experts are able to achieve maximum value and flexibility within the market to your best advantage.
  2. Extensive Market Experience – A broker will not be playing “both sides of the fence” so to speak. So when looking for space options, an expert will be able to leverage their existing relationships with previous tenants, landlords and brokers to ensure lowest prices possible for your business.
  3. Financial Analysis – A financial analysis will be performed by your tenant advisor to enable you to shop spaces and price ranges that fit your overall strategy. This budget planning can help with how much you pay overtime and to make sure that your investment is safe.

Consider all of the options when choosing tenant representation for your company. Are you looking for Chicago commercial tenant advisors? Check out TenantAdvisors.com for more information about finding your perfect commercial space in Chicago.

Office Space: Expect The Unexpected When Negotiating Your Lease

There are many terms which office space tenants think of during the office space lease negotiation phase. From the rental price to parking inclusions to who pays for the common area maintenance, there is certainly a lot of terms to consider. One aspect which tenants do not always consider during negotiations is what the relationship of the parties will be should a natural disaster occur, such as a hurricane or tornado, and cause damage to the premises. Although these instances don’t arise all that frequently, should they occur, you want to be sure that you, the tenant, are adequately protected.

Why You Should Consider Natural Disaster Safeguards

As a general rule, the tenant in commercial office space leasing agreements will still be responsible for paying rent should the premises become unusable in whole or in part as a result of a natural disaster. This is often the general terms included within a commercial lease agreement. Therefore, it’s important to safeguard yourself against these types of occurrences so that you won’t have to pay rent, or perhaps only pay a certain amount of rent, should this type of disaster occur.

Although natural disaster scenarios are not too common, these can and do happen, which makes protecting your interests as a tenant a necessary step to take. After all, you don’t want to find yourself in a position where your office space is unable to be occupied by you and your employees for an extended, or any, period of time. This lack of occupancy will lead to lost income and could, in turn, damage your business earning status.

How You Can Protect Your Tenancy Interests

The best way to protect your tenancy interests should a serious storm cause damage or produce restricted operations of the office space, is to include a term within the lease which states that the tenant will be free from paying rent or only have to pay a certain amount during the time in which the office space is unable to be used. This is a negotiation phase issue, which must be put into the lease in order for it to be effective. You will often find that the landlord believes such a term to be reasonable but it will only apply if it is included in the lease at the time in which it is signed.

This may not be an issue which is often on a tenant’s mind at the time the lease is signed. However, it is one which the tenant must consider ahead of time and have a safeguard in place via a lease term just in case the unexpected natural disaster would occur.

A commercial lease is a lengthy one and has plenty of terms to peruse, consider and agree to prior to signing it. Don’t let the unexpected event turn your office tenancy into a troublesome one. Make sure that you include the pertinent terms, one such term being the rights of the tenant should a natural disaster occur to make using the office space difficult or impossible.

Office Space

Consider Parking Options When Leasing Commercial Office Space

Office SpaceMany business owners are often focused on the office space itself when leasing a commercial office for their company. Although the interior of the office is quite important, it is vital to not overlook parking options when leasing office space. This is especially relevant in cities and largely populated areas where having parking on-site is an absolute necessity.

Inquire About Parking Right Away

When you are interested in a particular office space and are at the point of seriously considering leasing the chosen location, make sure you inquire about parking options right away, especially if parking is a must for you. This is a lease term which can often make or break a leasing commitment and force you to look elsewhere, especially if parking is what you want but not what you will receive if you lease that particular office space.

Find Out Whether Parking is Open or Reserved

Leasing will either be open or reserved in nature. With an open parking arrangement, you will have access to parking at a garage or lot but not receive designated spots, which means if the lot fills up, you are out of luck. With a reserved parking situation, you will have set office space parking and know that when you pull into your office parking lot, your parking spot will be available. This is often an important component for office space tenants to consider.

Ask About Client Parking Options

Even if you know that you will have office space parking for both you and your employees, you may not have parking spots available for your clients. It’s important to ask about this issue, and then determine if client parking is a necessity or not. Client parking is often an attractive feature as many customers and clients like to deal with businesses which offer ease of access to their facilities.

Make Sure Parking Terms are Included Within the Leasedeerfield

Even though you may have discussed parking terms and agreed that these features will be included with your tenancy, you must put it into writing and ensure that the lease contains the term related to parking. Rather than have a statement to the effect of “parking is included,” you should insert information related to how many parking spaces are included, whether parking is reserved or open, if clients may have access to parking spots while doing business with your company and other specific parking terms. Once the parking terms are included within the lease, you can rest assured that parking spaces will be available to you during your commercial office space tenancy.

Parking may not be a must-have inclusion for certain office space tenants. However, for others, having the access to parking for both employees and clients is a necessity which simply cannot be omitted from an office space tenancy. So long as you determine your parking needs, inquire about parking options and ensure that you will have parking spaces available to you, your company and clients, plus include such terms within the lease, your office space lease will consist of the pertinent items you need to do business efficiently.