Southcreek News

5 Tips for a Successful Office Space Lease Term in Overland Park

Sometimes dealing with problems with your landlord during your commercial real estate lease is something you can think about beginning of the lease. Here are a few steps to help you avoid problems during your tenancy, as suggested in the article “6 Steps to Avoid Issues in Your Commercial Lease”:

Clarify the terms. Before you instruct the lawyer to prepare the lease, make sure that the terms are drawn up in a heads of agreement to be signed by both parties. This can help avoid arguments over the actual commercial terms during the execution of the lease and the duration of the term.
Utilize professionals. It is important to make sure that a lawyer is the one who prepares the lease, particularly one with experience in commercial real estate who can help facilitate the deal smoothly. In addition, an experienced property manager can also be an asset in making sure that a property is maintained properly throughout the lease.
Take care of approvals. If you as a tenant are doing any building or improvements, make sure you get the necessary approvals in order before starting – for example, dealing with local councils. Dealing with any regulations beforehand can help avoid problems down the line.
Understand your obligations. Make sure that your lawyer clearly points out your obligations as a tenant, and then communicate clearly with your landlord during the early stages of your lease in order to take care of any duties – for example, the approvals suggested in number three.
Inspections. Inspect the property carefully before the lease begins and note the condition of the space. This will make things easier for both the tenant and landlord at the end of the lease. If possible, take photos to document the condition of the space.

If you’re beginning the negotiation process for your lease, keep these steps in mind to ensure that your tenancy runs smoothly and you maintain a good relationship with your landlord. Dotting your i’s and crossing your t’s early on can help prevent potential problems from even arising in the first place. The key is to make sure that all aspects of the lease are clear and the lines of communication stay open.

If your business is interested in Overland Park office space for lease, give a commercial real estate broker in Overland Park a call at 913-685-4100 to learn more about our affordable spaces.

3 Important Parts of a Small Office Lease in Kansas City

The goal of every tenant looking for commercial real estate is to find the best space for the least amount of money. Tenants look for something that will meet all of their needs, but will also fit in their budget. In order to achieve this aim, potential tenants need to understand what drives the cost of commercial space and how to deal with each of those costs. Here are the three most important factors that affect the cost of an office space, as suggested in the article “3 Tricky Things in an Office Space Lease”:

Location
The layout of an office space
The structure of the lease and negotiations

Understanding the relationship between these three things is the best way to effectively plan for acquiring an office space lease. Most failures to get a good space are usually the result of not dealing with one of these factors properly. There are so many hidden items in leases that if not handled correctly can really add to the cost and office space. One of the best ways to minimize these these costs and improve your chances of negotiating a good lease is to seek the expertise of a professional during the leasing negotiations – someone who can explain the nuances of each of these major factors.

If you are just beginning the process of leasing your first office space, consider these three factors and talk to an attorney or agent about what you want!

Give a commercial real estate broker in Kansas City a call at 913-685-4100 if your business is interested in office suites for rent in Kansas City.

The Tenant Benefits of a Renewal Option for an Office Space Lease in Overland Park

Negotiating a renewal option is crucial for a tenant. Landlords benefit very little from these clauses, but for a tenant they can mean leverage in future negotiations and more favorable terms down the line. Here are a few of the benefits of renewal options, as suggested in the article, “Negotiating the Renewal Option”:

A good renewal option protects you from circumstances in which other tenants in the property might want your space. You can negotiate to still have first rights to the space even if the other tenant will pay a higher rate or a larger tenant wants to expand into your space.
A renewal clause is essential in the event that you have to invest a lot of money in making improvements to space, because a move would result in the loss of that money.
A solid renewal cause is a good way to put a cap on the rental rate for another lease term.
Your renewal clause can also protect you from unfavorable market conditions in a few years, especially if you have negotiated in detail your renewal rental rate.

Don’t forget about the importance of this renewal option as you negotiate your primary lease. It might seem like thinking too far ahead, but this foresight could save your business a lot of money in a few years.

If your business is interested in Kansas City office space for rent, give a commercial real estate broker in Kansas City a call at 913-685-4100.

2 Types of Tenant Improvement Allowances for an Office Rental Space in Overland Park

If you know you want to make improvements to a space, the key is to address this as early as possible in negotiations. The tenant improvement allowance your landlord gives you as well as the length of your lease have an impact on the rental rate you will settle on. The two most important things you as a tenant should try to do during these negotiations is to get as much of an allowance as you can from the landlord and to also try to maintain control of the building process as much as possible. Here are two different types of tenant improvement allowances, as described in the article “Negotiating the Tenant Improvement Allowance”:

#1 Turn Key Build-out

In a turn key build-out structure, the landlord is responsible for all of the build-out expenses, which are factored into the rental rate and the plan for the office space that takes into account construction.

#2 Stated Dollar Amount

In a stated dollar amount structure, the landlord provides the tenants with the lump sum to put towards the build-out. Often this also covers any architectural and engineering expenses.

While many tenants prefer the turn key approach, there are pros and cons to both. The main goal that tenants strive for is to reduce out-of-pocket costs and to get the most out of their improvement allowance.

If your business is interested in finding the Overland Park office space for lease, give us a call at 913-685-4100 to learn more about our affordable office space in Overland Park.

3 Aspects to Understand About Renewal Options for an Overland Park Office Space

The process of creating an option to renew begins in lease negotiations. Landlords don’t always want to grant these provisions to a tenant because it limits their options down the line. However, most tenants demand this option, so it is fairly common in leases. The renewal clause determines when the tenant can ask for renewal, the length of the renewal period, and either the rental rate or the way that rate will be determined for the renewal period. Here are a few parts of the renewal option to be aware of as you negotiate your lease, as suggested in the article “Negotiating the Renewal Option”:

Notice date – renewal clauses usually require tenants to notify their landlord that they want to renew their lease within a specified period of time, usually a year to several months before the end of the lease. As a tenant, try to negotiate to make this period as long as possible, which will give you time to evaluate all of your options and make the best decision.
Rental rate – sometimes the renewal clause will actually state the renewal rental rate, but more often just the formula for this rate is stipulated and will be according to fair market value.
Term – the renewal clause also typically states the length of the renewal term. When you’re negotiating your lease, try to ask for several different potential options for lengths of the renewal term so you have some room to choose when the time comes.
Fair market value – if your rental rate is going to be based on fair market value, It is important to clearly define fair market value. Your goal is to make this interpretation as detailed as possible to avoid leaving it up to the landlord’s discretion at the time of renewal. There are a lot of aspects of this to discuss; one of the important things to ask for is a cap on the renewal rental rate. Also consider including a provision that determines that a third-party arbitrator will be consulted in the event of a disagreement.

Be sure to thoroughly consider your renewal option as you negotiate your initial lease. Make this clause as clear and detailed as possible to avoid complications and disagreements when it comes time to renew. It might be worthwhile to solicit expert advice to make sure this aspect of the lease is fair and favorable.

Give Kathy Woodward at DDI Commercial a call at 913-685-4100 if you’re interested in executive office rental in Overland Park!

6 Tips for Startups Trying To Negotiate a Favorable Small Office Lease in Kansas City

Startups don’t always have the most clout when trying to negotiate a commercial real estate rental with landlords. But it is not impossible for a startup to end up with good terms for their first commercial lease, particularly with real estate markets reviving in some parts of the country. Here are a few tips for negotiating for a favorable lease, as suggested in the article “How Startups Negotiate Favorable Leases”:

#1 Work With a Broker Small businesses—especially startups—can benefit hugely from working with a lawyer who is familiar with the industry and the area. Talk to other tenants in the building about the brokers they used, and try for someone who has experience with that building, or even just with the neighborhood. Commercial markets can be very specialized, so it is important to not only have representation, but to have representation that knows the context. Be particularly wary of seeking help from the landlord’s broker, who will be prioritizing the interests of the landlord.

#2 Evaluate the Location Consider the positives and negatives of a location. Remember that while a flashy location might be important for some types of businesses, that kind off luxury will also come with higher business license fees and taxes. Also consider things like parking for clients and building access for deliveries.

#3 Know What is Included in Your Rent Depending on the type of lease, your rent might not include everything–for example, you might have to pay separately for utilities, janitorial services parking, property taxes, maintenance of common areas, or insurance. All leases vary and are negotiable, so try to make sure that the terms in your lease match the particular needs and budget of your business.

#4 Ask for Concessions from Your Landlord Because the real estate market has been in such a slump, landlords have been offering a lot of great deals to tenants. But as markets in many areas start to improve again, these deals may get less and less frequent. Usually sweeteners are offered to long term tenants, so if it is possible, try to get a good deal on a long term lease while you can—but know that shorter leases are generally better for smaller companies because there is less financial risk involved.

#5 Include a Termination Agreement Give yourself an escape hatch both for the possibility that your business is hugely successful or struggling. Whether you have outgrown your space or you are having difficulty paying rent each month, a termination agreement can facilitate a much needed way out. Some landlords will want to be able to approve of a transfer of ownership of your business or ask for a personal guarantee, especially if you are a startup. Make sure that these terms are clear and try to negotiate to make them as favorable as possible. Best case scenario, you do not need a landlord’s permission to transfer a lease, which will allow you to make a deal if need be without worrying about pleasing your landlord.

#6 Try to Get a Cap Fees that increase annually can become a major burden for businesses in long term leases. Try to negotiate for a cap on management and operating fees based on a percentage of your rent. Caps like these can be difficult to get, especially in thriving markets, but they are still worth trying for.

While startups are not in the best position to negotiate great leases, it is still possible to come out with something favorable for your business with a little negotiation smarts.

If your business is looking for office space for rent in Kansas City, give Kathy Woodward at DDI Commercial a call at 913-685-4100!

8 Steps To Take Before Signing a Commercial Office Space Lease in Overland Park

Once you have found an ideal location for your office space and you have settled on a rental rate, there are still a few things you need to consider before actually signing the dotted line. Here are a few things to add to your checklist, as suggested in the article “What Do I Need to Know Before Signing a Commercial Real Estate Lease”:

Keep negotiating. Lease terms are not set in stone until you actually sign, so continue to try to adjust provisions that are unfavorable to your business. Landlords are often willing to be more flexible than you think.
Read it closely. Though leases don’t make for the most exciting reading and can be very long, it is so important to fully understand what is in your lease. Check and double check the terms to make sure they got everything right—start date, rent, rent increases, and any other important terms. Make sure you fully understand both your obligations and the landlord’s. Overall, know what you’re getting yourself into!
Settle your business’s legal structure. If you want the protections being incorporated offers, make sure that you have correctly filed your Articles (or Certificates) of Incorporation or Organization.The mailing process from the Secretary of State can take time, so make sure you sort this out well in advance.
Understand the terminology. Do not let yourself be surprised by leasing terms like “CAM,” meaning “Common Area Maintenance” or other basic rental terms. Make sure that the percentage of the CAM you are responsible for is based solely on the size of the building, and not how much of it is actually occupied.
Read the definition of you CAM. This can be a confusing part of the lease, fraught with hidden fees for tenants who do not read carefully. Make sure that you aren’t paying for anything you shouldn’t have to, such as administration fees over 3%, landlord’s legal fees for other tenant negotiations, build-out costs for other spaces, marketing costs for your landlord, etc. Try to also ask for a CAM Stop lease, which means that you are only responsible for increases in CAM and taxes above your base year, which can help you avoid hidden fees. You could instead also ask for a cap on your CAM fees so that they cannot rise above a specific percent.
Understand your capital expenditures. Capital expenditures in the context of commercial leases encompasses the costs of major structural expenses such as repairs of foundations, roofs, or HVAC systems. The distribution of these costs between landlord and tenant varies from location to location, but try to make sure that the biggest burden of these costs does not get put on you. If you do have to share a certain amount of responsibility for capital expenditures, try to negotiate with your landlord for some sort of cap on the amount you have to spend, or suggest doing regular maintenance a few times a year, but not major repairs.
Prepare for a guaranty. It is very rare to get away with signing a lease without providing some sort of guarantee. Most landlords will not sign anything without you giving a personal guarantee. But do your best to negotiate and manage the extent of this guaranty. Try to reach an agreement that says you only have to guarantee part of the lease term (i.e.) half, or that a guaranty only lasts a certain amount of months after you terminate your lease, rather than the remainder of the lease period.
Check to see if the lease is assignable. If you ever need to sell your business for some reason, it will probably be important that you still keep the same location, in which case you would need to assign the lease to the business that is the new owner. Try to make sure that your lease doesn’t allow your landlord to terminate the lease in the event of an assignment. Understand though that the landlord will still want the possibility of rejecting the assignment if the new owner is financially unsuitable.

Ultimately, it is important to check the details of your lease and negotiate for what you can, but also be realistic. Your landlord’s willingness to compromise is probably going to be related to the percentage of the property you will be renting—the smaller the property, the less likely the landlord is to deal with nit-picky negotiations. Consider finding a lawyer to help you review your lease and help you decide what is worth pushing for in negotiations. If your business is interested in office rental space in Overland Park, give a commercial real estate broker in Overland Park a call at 913-685-4100!

Understanding 5 Options for an Office Space Lease in Overland Park

There are several types of commercial leases to be aware of—here are the definitions for five of them, as outlined in the article “Lease Types Defined”:

1.Full Service (FLSV) – A lease in which operating expenses and property taxes are included in the stated rent.

2.Triple Net (NNN) – A lease in which the tenant pays a fixed rent rate, as well as other property lease expenses including taxes, maintenance, insurance, utilities, etc.

3.Full Service Except Janitorial (FLSVEJ or FSEJ) – Similar to a full service lease, except the janitorial services are not included in the rental rate.

4.Gross – A lease in which the listed rent covers taxes and operating expenses. This is essentially the same as a FLSV lease and the opposite of a NNN lease, and it is the most uncommon type of commercial lease.

5.Modified Gross (Mod Gross) – Somewhere between an NNN and Gross lease—some expenses are included, but things like utilities are most likely the tenant’s responsibility, but even utilities could be combined depending on how things are metered in the building.

If you are looking into commercial leases for your business, it is important to understand what each of these lease types mean and what kind of payment would be most cost efficient for your business.

If you are interested in finding out more about commercial realty in Kansas City, give a commercial real estate broker in Kansas City a call at 913-685-4100!

4 Questions to Ask About Energy Needs for Your New Office Space in Kansas

Moving is a great time to look into your energy consumption and needs and make any necessary adjustments. It is important to start this process before you actually move, so that you can have everything set up as needed by the time you relocate. Here are a few questions to consider about your energy usage before a move, as suggested in the article “Moving: Time to Review Your Energy Needs”:

What are our energy needs?

Take some time to take stock of your energy situation and rethink what you need. Your energy requirements might be different at your new location, and you might even need to adjust the equipment you use in your office, so consider what your new energy necessities will be.

Who needs what?

Start with mapping out where everyone in your new office will be working and what equipment they will require. Will there be enough phone lines and outlets to accommodate your layout? Do you need to adjust your layout plan or add any power points to the office? If things turn out to be simply a matter of installing a few more phone lines or power points, try to set this up in advance of the move so that everything is ready by the time you get there. Put these things in sensible locations, because changing them after a move can be inconvenient and expensive.

What can be upgraded?

This can be a great opportunity to reevaluate what kind of technology you need and purge anything that is outdated. Perhaps this is a good time for your office to shift towards wireless technology, utilizing laptops instead of bulky desktops. If you can afford it, consider getting new and better printers rather than lugging old ones to a new space. These upgrades will not only make your move easier and possibly save you some money, but they might also have a positive impact on your productivity going forward.

What are our energy costs?

Even if an upgrade in equipment is not in the budget for you, now might be a good time to check your costs and see if you can get a better deal with other utilities providers. Go online to compare costs of different providers and see if you can save yourself some money by switching over to a new service when you move.

Take this opportunity to really evaluate your energy costs and needs going forward to make sure you will be as efficient and cost savvy as possible in your new space!

If you’re interested in moving to an Overland Park office space for rent, give us a call at 913-685-4100 to find out about our affordable office space in Overland Park!

5 Ways to Boost Employee Morale and Productivity in Your Kansas City Office Space

Making an office space more efficient has the double positive effects of both boosting employee morale and, in turn, also generating greater productivity. By engaging employees and improving general office productivity, you might also see an improvement in operations and profit increases—creating a positive cycle of job satisfaction and a better bottom line for everyone. Here are a few things to try to improve the efficiency and mood of your office space, as outlined in the article “5 Tips to Improve Office Space Efficiency and Productivity”:

#1 Improve Lighting

If at all possible, try to utilize natural light in your office space. Studies have shown that sunshine can improve people’s moods, and lack of sunlight can actually lead to decreased work motivation. Even simply keeping blinds and curtains open—as long as it doesn’t interfere with anyone’s workspace—could help boost mood and make the office cheerier.

#2 Set Boundaries

It is important for small businesses who operate from home to restrict disturbances while concentrating on work, such as putting a “do not disturb” sign on an office door. This approach can also apply to an actual office space, particularly if there are open area work spaces. Headphones can be a sign that someone doesn’t want to be bothered, or certain workstations can be designated for quiet, independent work, whereas others can be for a more collaborative environment.

#3 Work on Organization

Sometimes a cluttered or disorganized space can really drag down productivity. Take some time to do a little cleaning and rearranging as necessary. Buy cheap storage options such as bins or small shelves, create labels for files and binders to make it easier to find them, and think about ways you can start to go paperless using cloud based software for storage of documents you don’t need regularly. If you have no idea where to start and cannot invest the time in such a project, look into hiring a professional to help your office get organized.

#4 Simplify Your Space

This goes hand in hand with getting organized. Sometimes the solution is to purge unecessary items, not just put them in more boxes. Get rid of things that take up too much space and don’t add a lot of function. Cut down on clutter such as piles of papers. Try to keep the space tidy and create less cleaning work for yourself in the future by keeping to the “less is more” rule.

#5 Add Scents

Air fresheners can really improve a space, and other options are also available, such as dried flowers or scented oils. Fragrances can really improve mood and motivation. Consider scents like vanilla, lemon, lavender, jasmine, rosemary, cinnamon, and peppermint. Another simple and natural way of boosting the office mood is adding plants to a space. Plants can both improve the appearance of an office and are proven have a positive effect on mood.

#6 Improve Meeting Rooms

Employees often spend a ton of time in meetings, so consider ways to make this necessary part of office life more comfortable. Add a water cooler, a coffee pot, or even some of the above mentioned fragrances specifically in a meeting area.

While these tips and practices may all seem to small and simple, sometimes little difficulties such as florescent lighting or a cluttered office can be barriers to productivity. Consider putting into practice some of these suggestions to help improve efficiency, morale, and productivity in your office.

If your business is interested in office suites for rent in Kansas City, give a commercial real estate broker in Kansas City a call at 913-685-4100.