Leasing an unfinished office space question....

[yasir]

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

[Jims5543]

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.

[TSNAPCRACKLEPOP]

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

[yasir]

Originally posted by TSNAPCRACKLEPOP
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...

[Jims5543]

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.

[TSNAPCRACKLEPOP]

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.....

[yasir]

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

[MRM]

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.

[rammstein]

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.

[yasir]

Originally posted by rammstein
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...

[rammstein]

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.