How to Avoid Real Estate Pitfalls in Your Business
Successful business owners are well known for their no-nonsense, get-it-done attitude. It’s great for building and growing a business, but it can become a hurdle when it comes to negotiating contracts for business space. Their tendency to make decisions now and ask questions later sometimes leads to costly mistakes they could avoid by consulting a professional commercial real estate broker.
Too Much To Handle
For example, Bob Gibbons, commercial real estate broker in Plano, TX, worked with two attorneys who wanted to expand their office to accommodate a new attorney and a paralegal. But there were several problems with the arrangement. First, the new attorney and paralegal had not committed to join the firm yet. Second, the space they were considering was twice the size they needed and would double their rent. They planned to sublet the extra space, but they hadn’t gotten the landlord to sign off on their plan.
A friend recommended these attorneys consult Bob before they signed the lease—and it made a huge difference. Bob advised the attorneys:
- Wait on the expansion until the new employees commit to joining the firm.
- Don’t lease more space than you need; check with the landlord to see if another, more suitable space is available.
- Extend the lease for another 2–4 years to lock in the current low rates.
The lawyers took Bob’s advice. In the end, they added the two employees, had the landlord build out an appropriate-sized space on another floor, and instead of doubling their rent, they’ll keep their rate (a 10% discount) for another five years.
Find The Right Fit
Owners of another business consulted Bob as they were renewing their lease. They were working on an agreement with the landlord to renew the lease while giving back 20% of their workspace. While the owners had done a good job negotiating the renewal, Bob knew they could reduce their space—and rent—even more.
After touring five other spaces of the right size, the owners were convinced it would work. With Bob’s help, they negotiated a new deal with the landlord to take over a smaller space in the same building—saving 15% over the life of their lease.
A Pro Can Help You Too
Bob is one of Dave’s commercial real estate Endorsed Local Providers (ELPs). You can find a commercial real estate broker Dave recommends in your area too. You can trust your ELP to save you time and money whether you’re looking to buy or rent space for your business. Contact your ELP today.