A lot of the work that goes into negotiating a commercial lease should occur before you even talk to the landlord. I cannot over-emphasize the importance of pre-planning and due diligence when selecting a location and landlord.
The major aspects of pre-planning are:
- Prioritizing what your business will need. Do you need space (square footage) most of all, or do you need good plumbing because you’ll be using a lot of water (e.g., restaurants, laundromats)? Are there special requirements for your business (such as daycare centers, or premises where liquor is served)? Know what is most important for your operation.
- Finding out what the space was used for previously, to see if it will convert easily to your intended use.
The major aspects of due diligence are:
- Scoping the area: speak to tenants, store owners, and business development organizations in the area (Small Business Solutions, Queens Economic Development Corporation, etc.). Ask tenants in the building you’re considering about their experience with the landlord. Also: are there complementary businesses in the area? Or are there large competitors planning to open nearby?
- Inspecting the space: You’ll probably be taking the space “as is”, which means you won’t be able to complain about defects or inadequacies after you sign. Measurements, code compliance, Certificate of Occupancy—make sure these are acceptable before you sign.
If you see any of these signs, RUN:
- They won’t let you inspect or measure the space in person
- They demand cash
- There’s no paper trail
- The space isn’t up to code
- Broker or agent has no proof of its connection to the Landlord
The presence of one or more of these factors is an indication that either the broker or the landlord is on the shady side.
