Leasing an unfinished office space question....
 

I have about 4000 sq feet unfinished office space that i am about to lease but have no idea how to lease it.....few questions are........
1)- The basic space goes for $12-$13/sq feet but the real question is,who finishes the walls,the ceilings,the plumbing,floors and all that ?
2)-Do i finish the above mentioned items and then just tack in the cost over the initial lease period to the basic rate ?
3)-How do i go about checking the tenants back ground ?
4)-Any other things that i need to be careful about ?
Thanks

Every commercial space I rented went like this, I was responsible for everything from the walls in, anything already in place was a bonus. I had to deal with lighting, A/C and any other improvement I made. I left it as-is if I decided to move on to another space.

I am paying $17 / s.f. right now and its no different. The building is brand new and I rented a "vanilla box" (4 white walls, drop ceiling with lights, a/c, small bathroom and cement floor) that I built out to an office myself.

When I paid $11 / s.f it was the same deal.

As far as background checks, I would want to talk to at least the last 2 landlords, remember the current one may be having problems and might lie just to get the tenant out of their space.

I would look for a standard commercial lease/rent agreement it will cover everything you need. Or even better, pay an attorney a few hundred bucks to draft an agreement for you. I have to carry a certain amount of general liability insurance for my space.

i go for 2-3 momths free rent to do the buildout, always has worked here in the midwest, in your dollar range.

Care to explain this a little more...

If office space is abundant then you will need something to entise in a rentor. offering 2-3 months free gets them in and they will use the savings to improve the space.

Where I am people are fighting for space so there are no deals to be had.

as above, it promotes some goodwill, and gives start ups a little cash to make the place nice, plus the cost of a sign, and the sign permits, deposits, advertising.....

I am about to sign the lease but have one more question...How do you decide how much to increase the rent when the first 5 year term is up ?
Thanks

Get a broker to represent and advise you. It will be well worth the money he charges you. Commercial real estate/leasing brokers earn their money as professionals because they bring something to the table. Use their expertise and get one who doesn't charge too much of a commission. Shop around until you find one you like. He'll make back the money he charges you times ten.

He's definitely talking annual. Thats the standard way we talk about it in the industry. If that was monthly, Kentucky must make golden poop.

No golden poop here in KY :( ..any way just finalized the deal with them for $16/sq ft/yr...5 year term with possibility of 2 five years extensions....every 5 year the lease will go up per CPI ( consumer price index ) which at the moment is around 3/year...
Will wait until the lease is signed before counting the chicks...

Good job with the CPI increases- you'd be suprised how many owners leave themselves with their pants down on leases- having extensions with no increases, or increases that are too small.