Nalewaik Insurance thanks for following me on Twitter! https://t.co/s7lbmxC6jc

Nalewaik Insurance thanks for following me on Twitter! https://t.co/s7lbmxC6jc

— Nathan K Smith (@AustinTenantAdv) December 14, 2019

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Sk.....SK thanks for following me on Twitter! https://t.co/1LaPXmxXSf

— Nathan K Smith (@AustinTenantAdv) December 9, 2019

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Sk.....SK thanks for following me on Twitter! https://t.co/1LaPXmxXSf

Sk.....SK thanks for following me on Twitter! https://t.co/1LaPXmxXSf

— Nathan K Smith (@AustinTenantAdv) November 28, 2019

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Shalonda Gordon thanks for following me on Twitter! https://t.co/vzDXQEhaEH

Shalonda Gordon thanks for following me on Twitter! https://t.co/vzDXQEhaEH

— Nathan K Smith (@AustinTenantAdv) November 20, 2019

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— Nathan K Smith (@AustinTenantAdv) November 20, 2019

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Why Landlords Will Only Do 5 Year Office Leases in Austin Tx

If you are trying to lease office space in Austin you have probably noticed that many landlords won’t agree to anything less than a 5 year lease. Don’t think that just because a space is vacant that a landlord will do a short term lease. Just because a space is vacant doesn’t mean they are not making money especially in a multi-tenant building that is mostly occupied.

Obviously landlords prefer long term tenants because it makes their investment more stable and profitable, however there are other reasons why they won’t do anything shorter than 5 years that I will explain below. 

They have a lot of interest in the space

If the space has a cool “creative” build out and/or is in a great location (e.g downtown Austin) you can bet that there will be a lot of interest in it. Most companies these days are looking for similar space…………cool creative spaces with open layouts, a few offices and a conference room, and break area. If a landlord is getting a  lot of activity on a space they are going to give first dibs to the company that is willing to sign a 5 year lease. It doesn’t matter if you submitted your 3 year proposal first. If another company comes in behind you that is willing to do a longer lease expect the landlord to give them preference.

If you are only able to commit to a 3 year lease then it’s important that you be negotiating multiple options at the same time, because it’s highly likely that one of those spaces gets leased out from under you to a group willing to sign a longer lease.

The space needs a lot of tenant improvements

If a space just needs carpet and paint the landlord might consider a 3 year lease unless there is a lot of interest in the space as discussed above. However if the space needs a lot of work (e.g. carpet, paint, remove walls, build new walls, hvac, electrical, etc..) then the landlord will need a longer lease.

Landlords are in the business of making money when they rent office space. The more a landlord spends on improvement costs the longer lease they need to be able to recoup that initial investment. It would not make sense for them to spend more money on a space than what they are able to receive in rent payments. A longer lease gives them more time to amortize the costs and be profitable on leasing the space.

For example, say you were leasing 2,000 sf office space in downtown Austin at $8,000 per month and the landlord offered to give you a $40,000 tenant improvement allowance. Keep in mind that about $3,000 of that is operating expenses (aka nnn). With a 5 year lease the landlord is able to amortize that cost over a longer period of time thus allowing them to be profitable sooner. 

It’s a Class A Office Building

There are some class A office buildings that will do 3 year leases, however most of them are willing to wait for a company that is willing to sign a 5 year lease. These buildings don’t like to have tenants always moving in and out. They prefer to lease to established companies with great credit that have the confidence in their business to sign longer leases. Most companies that lease class A office space also like to have nice finish outs which warrant a longer lease because of the high build-out costs.

 

Joe thanks for following me on Twitter! https://t.co/TGgXC7Zdq0

Joe thanks for following me on Twitter! https://t.co/TGgXC7Zdq0

— Nathan K Smith (@AustinTenantAdv) November 16, 2019

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Josh Daspit thanks for following me on Twitter! https://t.co/Qoncn6tern

Josh Daspit thanks for following me on Twitter! https://t.co/Qoncn6tern

— Nathan K Smith (@AustinTenantAdv) November 15, 2019

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Bella thanks for following me on Twitter! https://t.co/B2gJmKskEs

Bella thanks for following me on Twitter! https://t.co/B2gJmKskEs

— Nathan K Smith (@AustinTenantAdv) November 15, 2019

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Multimusic14 thanks for following me on Twitter! https://t.co/X7Qo9Db1LB

Multimusic14 thanks for following me on Twitter! https://t.co/X7Qo9Db1LB

— Nathan K Smith (@AustinTenantAdv) November 14, 2019

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Top 11 Considerations When Leasing Medical Office Space

Health care practices have a variety of requirements when leasing medical office space. Whether the office space will provide clinical, diagnostic, laboratory, or other services, healthcare providers’ needs differ drastically from the needs of ordinary office tenants. Though finding an appropriate medical office space can be challenging, qualified medical office real-estate brokers can streamline the process and save you time and money!

Here are 11 essential issues to consider when reviewing spaces and negotiating leases for medical office space:

1.  Cost: Though the sticker price (in other words, the rent) of an office space is the most obvious aspect of a space’s affordability, consider other factors that will increase real-estate expenditures. For instance, if you’re leasing an ordinary office space for conversion into a medical space, it is important to account for conversion costs, which may be quite high. These costs may be enough to deter you from converting a traditional office space, especially since the conversion costs may not pay off in the long run; conventional office spaces lease for shorter periods of time than medical spaces do, and opportunities for renewal may be limited.

2.  Accessibility: Depending on the nature of the practice, the office space must be in a location accessible to patients. Visitors with serious illnesses or physical handicaps must be able to easily make their way to the space, or they may simply decide to seek help elsewhere. Consider whether the space you’re looking at already has enough wheelchair ramps, elevators, electronic doors, and other accessibility amenities. Planning to add a practice’s own accessibility features may be more costly than anticipated, and may not even be very helpful, especially if accessibility aids might be relegated to inconvenient locations in or around the building.

3.  ADA Compliance: Because accessibility requirements for medical offices are strict, as per the Americans with Disabilities Act, anyone seeking medical office space should look for a location that already meets as many of the stringent requirements as possible. Because installation of ADA-compliant accessibility amenities may be expensive, as discussed above, it is important for tenants to try to negotiate lease terms that place at least some of the costs of ADA compliance on the landlord.

4.  Parking: Usually, it’s a good idea to have a lot more parking space for a medical office than for an ordinary office: experts estimate that a medical office should have five parking spaces per thousand-unit of square footage inside. Also consider proximity; the office should have a convenient drop-off area adjoining a closely located parking lot.

5.  Improvements: Traditionally, landlords require that any improvements or changes to the building be made by contractors that they know and trust. Because medical office spaces have unique improvement requirements, you will have to communicate clearly with the property owner about introducing new contractors specialized in building medical facilities. The landlord will retain the right to access the space as demolition and remodeling takes place, in order to check in and verify that the value of the property is not negatively affected by the remodel.

6.  Biohazards: Another deterrent to owners of conventional office spaces may be biohazards; the office will probably generate and dispose of biohazardous waste, regardless of the type of medical practice. Furthermore, the office might require installation of machinery that presents radiation risks, such as X-ray machines and and CT scanners. In such cases, special shielding will need to be installed, and landlords may balk at the magnitude of such modifications, especially since shielding modifications are not usually covered in standard office space leases. Therefore, be aware that the lease for a conventional office space will have to be negotiated in detail, which may delay the process and incur legal fees.

7.  Use: Matters such as improvements, biohazards, and ADA compliance, discussed above, will almost certainly fall outside the range of standard lease language. To prevent lease violations, avoid boilerplate leases and conceive of a lease adapted to the specific needs of the tenant with a medical practice.

8.  After-hours Access: Many conventional office-space leases limit access to standard business hours (8-5). However, medical practices frequently see patients during extended hours, or operate 24 hours a day. Be sure that the lease specifies access terms appropriate to the needs of the medical practice, and also ensure that the lease language specifies exactly how, and to whom, responsibility for utilities costs will be allocated.

9.  Landlord Access: Usually, conventional leases allow landlords the right to enter any part of the space at any time to make sure that it is being used properly. However, medical practices must ensure the privacy of their patients, so lease language should specify a protocol by which the landlord may access the leased space without violating patient confidentiality. The landlord should expect access to the space by appointment or during certain hours, but the lease language should be clear and sensitive enough that the needs of both tenant and property owner are fully addressed.

10.  Exclusive Use Provisions: Because competition among healthcare providers can be stiff, tenants should negotiate lease terms that prevent the landlord from leasing adjoining or proximal office space to identical but competing medical practices. For instance, if the office space is located on an office strip or in a building with multiple suites, a competing medical practice should not be able to set up shop in the same strip or building. That said, make sure that the lease language is very specific regarding what a competing practice consists of, as the presence of a complementary medical establishment might be beneficial, or even desirable.

11.  Find a Qualified Broker: In the search for medical office space, it is best to start out with a lease broker with proven experience negotiating for medical offices or facilities. These brokers will be better suited to negotiating complex lease terms that account for exclusive use provisions, landlord access, after-hours access, biohazards, ADA compliance, and accessibility installations. Qualified brokers will streamline the leasing experience and will help secure a lease that fully benefits your medical practice.

The list above is only a few of the considerations when leasing medical office space.  It’s important that healthcare providers engage the right team to find the right space and to review and negotiate all the terms and conditions that will allow them to operate their practice.

If you need help finding and leasing medical office space don’t hesitate to contact us!

SEXYXXX thanks for following me on Twitter! https://t.co/mzZRoxLVqR

SEXYXXX thanks for following me on Twitter! https://t.co/mzZRoxLVqR

— Nathan K Smith (@AustinTenantAdv) November 12, 2019

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Which is the right office space for you?

Looking at the Building’s Features

Many companies or office leases often take into consideration the economic value of a workspace before renting it. However, occupancy costs do not just include the rent rate.

When considering a property as a potential office space, office tenants should also consider the building’s features and the Landlord’s service as it can influence the rent rate. It is most common to hear about tenants and brokers reporting poor performance and drawbacks because they did not take into account the building’s full potential and features.

There are other factors which are often overlooked but must be considered when checking a property:

Efficiency

Although some properties offer low lease rates, it may not be useful and practical once you compute the total cost of occupancy and the space’s efficiency. In one specific scenario, a person can offer you a 10,000 square foot space with a 20% loading factor (a percentage is allotted for non-business related space) while a landlord can offer the same price for a 12% load. Although the first offer is cheaper, the landlord’s building may be better because the tenant can put more desks in the space without being restricted by the load factor.

Always remember to compute the occupancy cost projections based on the absolute and present values and analyze them per usable square feet. This will allow tenants to see the differences in common area factors and efficiency.

Operating expenses

This is the overall equivalent of the expenses needed by tenants such as taxes, janitorial, maintenance and personal expenses while using the office space. Get the advice of a broker who can ensure that the building selected would give cheaper operation costs. Tenants should also consider using building efficiency items such as energy-saving appliances and an HVAC system.

Building system

Not all buildings can provide and support specific technologies or industries, which is very important because it can affect production capacity. The technology industries – for instance, would require higher power and cooling capacity for their office space but it may not be allowed or applicable with the building. Other businesses – like those requiring a mobile workforce, would need a very big parking space which would not require constant parking contracts.

The IT sector and telecommunication providers would also need the building to support redundant fiber loops. Others would even require the building to provide them a space for back-up generators for their 24/7 operation

Management

The building must have a dedicated and friendly staff for tenants to discuss building-related inquiries and needs. Some tenants may even speak with other tenants to get their reviews regarding the building as it would allow them to determine the management’s quality and the services offered for tenants.

It is important to check whether the building’s management can deliver the quality needed by the tenant and how close do they work with the existing tenants.

Usually, tenants complain about the following

• Heating, ventilation and air cooling system (HVAC)
• Janitor or maintenance staff
• Elevator
• Parking

Tenant mix

Some tenants may find their building option wrong especially once they see that the existing tenants may pose problems for the company. Others may find it likely that their competitors are in the same building.

Having an attractive tenant mix can show potential tenants that the building would not just support higher economics but also show that it is the best place to be. The building and its tenants also is key in developing a brand and creating the labor base. Usually the property gives out the first impressions over a building.

Green building

Nowadays, sustainability is a critical factor that businesses must meet because of the growing standards needed to make buildings greener and environment-friendly. It is also a must have nowadays to support a company brand.

The tenant’s broker must be able to determine green building terminologies and assist in checking whether or not a building passes its green building standard. In the US, for example, brokers must be familiar with the Leadership in Energy and Environment Design Green Building Rating System as passed by the US Green Building Council.

Costs and other factors

Finally, some companies also take into consideration other factors like the coolness or benefit factor of a building. However, this should not be the case because not all benefits can be received from a specific building.

One must need to be cautious with regard to renewing lease and check if the financial capacity of the company can handle additional lease costs in the market place. Of course, tenants can do both to ensure that the building is fit for your needs.

Difference Between USF and RSF Calculations in Commercial Leases

When evaluating commercial lease options whether you are renting office space, warehouse space, or retail space, it’s very important to understand the difference between usable square feet (USF) and rentable square fee (RSF) when calculating your monthly and yearly rent.  This is often misunderstood by tenants as many landlords use different names for this such as R/U factor, common area factor, add-on factor, R/U ratio, etc.  If you don’t know then make sure you know how many sf your company needs to physically be able to occupy and ask what the USF/RSF ratios are as the amount of rent you pay is determined by these numbers.

Usable Square Footage or USF

This is the amount of square footage that you actually occupy and do not share with any other tenants.  This only includes the space that your furniture, equipment, and employees reside in.  For example if you measure your office with a tape measure and come up with 10 feet x 12 feet or 120 square feet this is your usable space.

Rentable Square Footage or RSF

RSF is is the square footage used to calculate your rental rate.  This is the USF + your share of the buildings common areas that are shared by other tenants in the building.  Common areas shared by all tenants include restrooms, janitorial closets, electric and telephone rooms, lobbies, fitness center, etc.  Common area does not include stairwells, elevators, and other mechanical space.  In Austin, Tx common area percentages range from 17% to 21%.  When asked how many SF a particular space is most landlords and listing agents will respond with the RSF however it’s important to confirm that number.

How to Calculate Rentable Square Feet

Let’s say your company needs to physically occupy 2,000 usf.  The building you like has a common area factor of 20%.  To determine your rentable square feet perform this calculation:  2,000 usf x 1.20 (common area factor) = 2,400 rentable square feet.  When you ask landlords how many square feet they have available most of them will respond with the RSF.

Do All Buildings Have a USF and RSF?

No.  In some buildings such as retail space or garden style office space your USF typically equals your RSF because these types of properties have no common areas and tenants have their own restrooms and entrances.  When quoted a square footage it’s important that you confirm whether they are quoting USF or RSF.

Key Takeaway

There is no standard for how many square feet of common area buildings have.  When asked how many sf an office space is most building owners and listing agents will respond with the RSF, however it’s important that you confirm whether it’s USF or RSF.  As you compare buildings it’s important that you know how many square feet that you need to physically occupy AND ask each landlord what their common area factor is…………meaning HOW MANY SF WILL YOU OCCUPY VS HOW MANY SF YOU PAY RENT ON. If you are looking for Austin office space for lease and would like more information about this topic feel free to call Austin Tenant Advisors.

Difference Between Commercial Office Building Classification Types

When searching for office space it’s important to understand the building class types as it’s how you are able to compare them to each other. Office space buildings are typically classified as A, B, or C which represent a subjective quality rating based on each buildings ability to attract similar tenants.  The following factors are typically considered when determining a buildings class:

• Age of building
• Location
• Building finishes
• Technological capabilities
• Rental rates
• Amenities
• How well building is maintained
• System standards and efficiencies
• Location and accessibility
• Market perception

Building amenities would be considered as services provided in a building that are helpful to office tenants or their employees and include services such as fitness centers, child care services, food facilities, copy services, building conference rooms, mail service, dry cleaning services, etc.  Building finishes would include the quality of materials, architectural design, and other hardware and finishes.

Definition of Classes of Office Space

Class A Office Space

Typically the most prestigious office buildings in the best locations (e.g Austin office space for lease in downtown Austin). These buildings will compete for the premier office users who seek “image” space, and rents will be higher than average for the area. Class A office buildings will have state of the art building systems, modern technology, amenities such as fitness centers and conference rooms, high level building finishes, defined market presence, and the best accessibility.

Class B Office Space

These types of buildings are well suited more most types of users and the rents will be in the average range for the area.  They are typically 10-20 years old however the building and systems are well maintained. Some maybe a little outdated and not have the most modern technology and mechanical systems, however after a few upgrades some can be converted to class A. You typically won’t find any security guards, fitness centers, or other amenities found in class A.

Class C Office Space

These office buildings compete for tenants seeking value, functional space. Rental rates will typically be below average. They buildings are typically about 20 years old. Some have been renovated and are well kept, however most of them will lack modern upgrades. For example the HVAC systems may not function as well and the elevators and other mechanical systems are outdated. Class C Buildings are typically found in the least desirable areas

In summary if you are a company that needs to have a certain “image” level then Class A space is right for you.  If you just want to be in a nice, well maintained building with average lease rates then go with Class B space.  If you are a startup or nonprofit and on a budget then Class C office space will be your least costly option.

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

— Nathan K Smith (@AustinTenantAdv) November 6, 2019

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Belldon Colme thanks for following me on Twitter! https://t.co/gcm3AogJHt

Belldon Colme thanks for following me on Twitter! https://t.co/gcm3AogJHt

— Nathan K Smith (@AustinTenantAdv) November 2, 2019

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What is a Full Service Lease?

A full service lease is a type of commercial lease in which the quoted rental rate includes all costs associated with renting the space such as the taxes, building insurance, electric, maintenance, janitorial and other operating expenses.

The landlord (lessor) pays all the building operating costs and bakes those into the rental rate, which depending on your market maybe quoted as a monthly (e.g. $2.91 sf/mo) or yearly (e.g. $35 sf/yr) rate.

Most Full Service Leases Include a Base Year Clause

Now keep in mind most full service leases also require tenants to pay for any increases in the building operating expenses that exceed the base year operating expense of the lease. A tenant’s base year is the actual operating expense portion of the quote rate that is established at the end of the 1st calendar year. For example say the full service lease rate is $35 sf. A portion of that $35 sf are the operating expenses………let’s say $10 sf. If the actual operating expenses are $10 sf at the end of the first year the base year would be $10 sf.

At the end of each following year the building owner will determine what the actual operating expenses are. If the operating expenses exceed the base year then the tenant will be billed any amount over that. For example if $10 sf is the base year and at the end of year two the actual operating expenses are $10.50 the landlord will bill the tenant an extra $0.50 sf.

What A Full Service Lease Does Not Include

• Phone
• Internet
• Sales Tax
• Tenant property and general liability insurance

It’s Important to Confirm What is Included in a Full Service Lease 

When evaluating commercial spaces it’s important understand the different types of leases and ask landlords exactly what is and what is not included in the quoted rate. The reason is that the meaning of full service lease is different depending on the market you are in. Also, the definition of full service lease can be different based on the landlord or listing agent that you speak with. 

It’s also important to find out what the actual operating expenses were for the last 2-3 years so you can budget for future increases.

If all of the talk about commercial lease types is confusing then you might want to consider hiring a local commercial real estate agent to assist you.

 

SEXYXXX thanks for following me on Twitter! https://t.co/mzZRoxuk2h

SEXYXXX thanks for following me on Twitter! https://t.co/mzZRoxuk2h

— Nathan K Smith (@AustinTenantAdv) October 29, 2019

from Twitter https://twitter.com/AustinTenantAdv

Joe thanks for following me on Twitter! https://t.co/TGgXC7Zdq0

Joe thanks for following me on Twitter! https://t.co/TGgXC7Zdq0

— Nathan K Smith (@AustinTenantAdv) October 24, 2019

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Considerations When Buying a Business That Rents Commercial Space

Some people prefer to buy an existing business rather than start a brand new company from scratch. In most cases the business you are buying has leased either office, retail, or warehouse space. Because of that you are not only negotiating to buy the business you also have to negotiate the remaining lease. One of the biggest mistakes people make when buying an existing business is not reviewing the current lease situation.

Commercial leases are going to be one of your biggest operating expense line items. If you make mistakes it could cost you dearly later on and ruin the success of your new endeavor. If you don’t know anything about leases then it would make sense for you to hire a local commercial real estate company.

To help guide you through the process below are a few things to review regarding the existing lease situation before signing a contract to buy the business.  

• Get a copy of the original lease and all of the amendments, renewals, assignments, etc.
• Make sure you understand the basic terms of the lease obligation and what you will be responsible for
• How much lease term is remaining?
• What is the lease expiration date?
• What are the base rents due each year for the remaining lease term
• What are the current estimated NNN?
• What other expense lease obligations are there (e.g. electric, hvac maintenance, general liability and property insurance, etc..)?
• How much has the electric been each month for the last 12 months?
• Who handles the repair and maintenance of the HVAC units?
• What is the sublease / assignment process?
• What financials does the landlord need to see before approving the assignment?
• How much is the security deposit?
• Will a personal guarantee be required to secure the lease?
• What Improvements and FFE that would convey with the lease?
• What terms of the lease will and will not transfer to assignee (eg assignment and sublease option, renewal option, etc).
• Is there a renewal option?

Those are just a few questions that you need answers to regarding the current tenant’s lease situation. If you are buying a business you need to know this stuff. If you don’t you risk the future success of the business.

Joe thanks for following me on Twitter! https://t.co/TGgXC7Zdq0

Joe thanks for following me on Twitter! https://t.co/TGgXC7Zdq0

— Nathan K Smith (@AustinTenantAdv) October 22, 2019

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Josh Daspit thanks for following me on Twitter! https://t.co/Qoncn6tern

Josh Daspit thanks for following me on Twitter! https://t.co/Qoncn6tern

— Nathan K Smith (@AustinTenantAdv) October 21, 2019

from Twitter https://twitter.com/AustinTenantAdv

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

— Nathan K Smith (@AustinTenantAdv) October 18, 2019

from Twitter https://twitter.com/AustinTenantAdv

Best Office Space Furniture Stores in Austin TX

Now that you’ve signed your office lease it’s time to start getting it ready to occupy. During the construction of your tenant improvements (if needed) you want to plan the move, get the IT stuff (phone/data cabling & other IT equipment set up, get property and general liability insurance, and shop for office furniture. 

Shopping for office furniture is not as easy as you think. There are a bunch of different types of furniture to choose from AND you want to make sure you coordinate with the office colors and layout. Also you have to decide whether buying or renting office furniture is right for your business. For example if your in a short term lease then you might want to consider renting office furniture until you are in a long enough lease that it makes sense to purchase.

If you don’t have the time to deal picking the right office furniture then consider hiring a good interior designer that specializes in office build-outs. In many cases the architect you choose may also offer interior design services.

Services You Should Expect From Good Office Furniture Stores in Austin

1. Free test fits to help you evaluate office spaces before signing a lease
2. Free office space planning, interior design, and layout after lease is signed
3. Sells used, refurbished, and new furniture
4. Offers furniture rental services
5. Office furniture delivery, assembly, & installation
6. Office furniture moving and relocation services
7. Local Austin warehouse or showroom to be able to see examples

Should You Rent or Buy Office Furniture?

If you are currently leasing office space in Austin on a short term basis then it would make more sense to lease office furniture or if subleasing an office with short term left try to negotiate to use the existing furniture. 

If signing a longer lease 4-5 years or longer then it might make sense to purchase. HOWEVER every company is different. It’s important to carefully evaluate your current and future needs as well your cash flow and determine which is the right decision for your company.

Lease Expensive Office Furniture in Austin

If you are on a budget your best bet is to purchase USED office furniture from one of the vendors listed below………or shop Ikea’s office furniture. I know many companies that still buy their furniture at Ikea even though they are not in start up mode anymore. Ikea’s office furniture is not as high quality as others however it will still get you what you need.

Office Furniture Stores Austin Tx 

#1 Office Furniture Now

Located in Southeast Austin at 4201 Supply Court, Suite 100, Austin, Tx 78744. http://www.officefurniturenow.com/

They have been selling and installing used, refurbished, and new office furniture since 1997. They offer consultations & space planning. They sell new office furniture and pre-owned furniture. They have a 20,000 sf warehouse / showroom full of office desks, workstations, chairs, and accessories. From modern office furniture in Austin to traditional they probably have or can get what you need.

#2 Smart Buy Office Furniture

 Located in North Central Austin at 8910 Research Blvd #F2, Austin, Tx 78758 https://www.smartbuydesk.com/

They specialize in laminate office desks that come in a wide variety of colors, shapes, and sizes. They have modern desks, contemporary, and traditional office desks. They also sell other types of new and used cubicles, office chairs, and accessories.

#3 Cox Office Furniture

Located at 8650 Spicewood Springs #140 Austin, Tx 78759 http://coxofficefurniture.com/

They operate out of a 17,000 sf retail store and focus primarily on selling  used office furniture (e.g. clearance, dented, and scratched), however they also sell some new furniture. 

#4 Texas Office Products & Supply (TOPS)

Located in Northeast Austin at 11055 N IH-35 Austin, Tx 78753 http://www.topstexas.com/

TOPS specializes in pre-owned brand name commercial quality office furniture from desks, cubicles, conference tables, and file cabinets

#5 Facilities Resource Inc

Located in central Austin at 11100 Metric Blvd, Suite 450, Austin, Tx 78758 http://www.facilitiesresourceinc.com/

They are a full service company that only sells, delivers, and assembles new furniture. They also provide project management, facilities management, and space planning services

#6 Workplace Resource

Located in downtown Austin at 1717 W 6th St, Suite 190, Austin, Tx 78703 http://wrstx.com/

These guys specialize in only high end new and modern office furniture. They do not have a warehouse however do have a small showroom in their office. If you like They work with over 200 manufacturers including Herman Miller, DIRTT, and Kimball.

Conclusion

Again shopping for office furniture is more of a process than you think. Also it’s expensive so you want to make sure you maximize the efficiency of every square foot. Whichever company you choose make sure you take advantage of their space planner.

Questions to Ask Landlords Before Leasing Restaurant Space

For most restaurant owners their success or failure is determined the moment they sign their lease.

Why?

Because most get in a rush to find retail space for lease and overlook important clauses and/or make mistakes during the negotiations. Part of that is just knowing what to ask landlords. Having information about the space, previous tenants, neighboring tenants, etc is key to ensure that you negotiate effectively and mitigate your risks.

To help get you started below is a list of questions to ask landlords before signing a restaurant lease.

When do I start paying rent?

You need to negotiate enough time to build out the space and/or enough time to ramp up sales before you start paying rent.

Depending on the existing condition of the space restaurant build outs can take up to 6 months, and you ideally don’t want to have to pay rent during that time.

Can I sign the lease as an entity rather than personally?

Creating an entity for your restaurant creates a layer of protection for the business owners. In the event you are not able to pay your rent or meet other lease obligations the landlord can only go after the entity assets (other than a guarantee if exists). 

This is especially important when you operate more than one location. Ideally you want each location under a separate entity. That way if one location defaults it will not effect the other locations.

If you sign the lease personally the landlord has the ability to go after your personal assets to recoup any lost rent.

Do I have to sign a personal guarantee?

If you are a brand new business then you most likely will have to sign some sort of personal guarantee in which you will be liable for debts/damages in the event the entity is not able to take care of.

However you can negotiate to have limits or caps on personal guarantees. For example you can negotiate to have the personal guarantee limited to the landlords unamortized cost of doing the deal (tenant improvements, lease commissions, etc.), limited to a certain dollar amount, or limited to X number of months of rent (base and/or nnn). You can also negotiate to have the personal guarantee amount burn off after x months, years, etc.

At the end of the day you still may have to sign a personal guarantee however try to negotiate to limit your personal exposure as much as possible.

Why did the last tenant leave?

If the last tenant was a restaurant then it’s important to find out why they left. Did they go about of business, relocate, etc? Where they bought out? Why did they go out of business? Make sure you try to get the whole story.

Are their any liens on the space?

If the space was formerly occupied by another restaurant and they went out of business there could potentially be existing liens. What means is that tenant owes creditor(s) money and until those liens are paid no one can operate another restaurant.

Would be a good idea to get this in writing by the landlord.

Can I get an exclusive clause?

Ask to be the only restaurant in the shopping center that is allowed to serve the type of food that you do. You are already going to have competing businesses around your shopping center. You don’t also want competing restaurants in the same retail center that you lease space in. 

Make sure the landlord is not able to lease space to competing restaurants and no other tenant is allowed to sublease space to competing uses.

If they do make sure their is some sort of financial penalty.

Am I able to get a liquor license?

Find out if the location is capable of getting a liquor license, and if so find out how much it will cost. The last thing you want to do is sign a lease only to find out that there is a church nearby or that the city is not issuing anymore liquor licenses, or that the cost is grossly too high.

There maybe certain areas in the city that do not allow licenses or there could be a cap on the number of licenses that are issued. Do your homework.

Can I change the type of restaurant later on?

What if your original concept does not work out or you decide to retire and sublease the space? If so you want the ability to change the concept or type of food that you serve. Landlords like to control their tenant mix and don’t like deviating from the use they originally approved. However, do your best to insert some sort of clause that allows you to change the food concept with landlord approval.

Can I assign my lease to another restaurant user?

What if you want to retire and sell your restaurant? During lease negotiations it’s important to limit the limitations on the sublease and assignment clause. 

Who pays for repairs of the HVAC units?

In most restaurant or retail leases the tenants are responsible for maintaining and repairing the HVAC units. That is why during the initial lease negotiations it’s important to find out how old they are and require that the landlord have them inspected and repaired (if needed) by a licensed hvac technician. Also if the existing units are old you want to get the landlord to provide some sort of warranty for repairs and replacement.

Obviously this is not an exhaustive of list of questions to ask and discuss with landlords with renting restaurant space, however it should get you started.

If you have any questions feel free to give us a call at 512-694-7803

 

 

Axle Sales Partners, LLC thanks for following me on Twitter! https://t.co/ZeqJWcqhm6

Axle Sales Partners, LLC thanks for following me on Twitter! https://t.co/ZeqJWcqhm6

— Nathan K Smith (@AustinTenantAdv) October 7, 2019

from Twitter https://twitter.com/AustinTenantAdv

CommercialRealEstate Assistant thanks for following me on Twitter! https://t.co/bX7czWYd59

CommercialRealEstate Assistant thanks for following me on Twitter! https://t.co/bX7czWYd59

— Nathan K Smith (@AustinTenantAdv) October 2, 2019

from Twitter https://twitter.com/AustinTenantAdv

Eddie Chen thanks for following me on Twitter! https://t.co/fFF99Py5lu

Eddie Chen thanks for following me on Twitter! https://t.co/fFF99Py5lu

— Nathan K Smith (@AustinTenantAdv) September 25, 2019

from Twitter https://twitter.com/AustinTenantAdv

Josh Daspit thanks for following me on Twitter! https://t.co/Qoncn6tern

Josh Daspit thanks for following me on Twitter! https://t.co/Qoncn6tern

— Nathan K Smith (@AustinTenantAdv) September 25, 2019

from Twitter https://twitter.com/AustinTenantAdv

Value of a Tenant Representation Broker

The tenant representative is an advocate for the tenant in commercial leasing. This puts the tenant on an equal footing at the negotiating table with the landlord or the landlord’s agent. 

The tenant representative acts either as the local real estate arm of the client or as a local consultant to a corporate real estate department. In many assignments the tenant representative works with CEO’s, real estate departments, financial officers, human resource personnel, division managers, office managers, and legal counsel to develop, define, prioritize, and strategize space solutions for the client’s business needs.

In addition of advocacy, tenant representatives offer clearly valued and definable benefits to their clients

Benefits of a Tenant Representative

Competitive Advantage

A Tenant representatives knowledge of the product and the process will create a professional competitive environment between building owners.

Professionalism

This translates into credibility with property owners, and an ability to minimize the complications of the transaction process.

Market Knowledge

Gives the client greater leverage when dealing with landlord agents or the landlord directly thus a level playing field is established.

Experience & Track Record in the Industry

Assures the client that the agent has successfully handled the types of problems the client is experiencing. Tenants will benefit from the tenant reps experience.

Well-defined Focus on a Narrow Objective

The agent will not be distracted by conflicting interests. Serving the clients best interests will be the only focus.

Vendor Resource

You will have access to the tenant representatives network of vendors such as attorneys, architects, moving companies, contractors, etc…

 

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

— Nathan K Smith (@AustinTenantAdv) September 21, 2019

from Twitter https://twitter.com/AustinTenantAdv

Things to Consider When Renting Restaurant Space

Leasing restaurant space is similar to renting retail space however there are a few nuances about restaurant space that you need to be aware of. The last thing you want to do is get stuck in a 5-7 year restaurant lease that was not negotiated properly. If you have not leased restaurant space before it would be a good idea for you to hire an experienced restaurant real estate advisor to guide you through the process. If you want to go it alone the following things to be aware of will get you started.

Lease & Rent Commencement Dates

Most leases have a lease commencement date and a rent commencement date. It’s important that you know and understand the difference between the two. 

• The lease commencement date is the date that the lease is signed. 
• Rent commencement is when the first months rent is due.

When negotiating a restaurant lease it’s important that you give yourself enough time to build out the space, get your certificate of occupancy, and open for business before you have to start paying rent.

Restaurant Space Operating Expenses

When leasing restaurant space tenants have to pay their pro rata share of operating expenses (aka NNN) if in a multi-tenant building or if in a single tenant building pay 100% of opex. These operating expenses are typically referred to as “additional rent” and include charges such as the property’s taxes, insurance, and common area maintenance (CAM).

The common area maintenance charges include maintenance and repairs to parking lots, walkways, roof, etc. Additionally they include security and utilities for the common areas.

Triple nets (NNN) are estimated each year and included as part of the tenants monthly rent. The tenant’s pro rata share is calculated by dividing the square footage of tenants space by the total square footage of the building. 

For example if the retail tenants space is 2,000 sf and the total building was 10,000 sf, that tenants pro rata share would be 2,000 / 10,000 = 20%. Again if the tenant occupies the entire building then they pay 100%.

Exclusive Use

Restaurant users will benefit from having complimentary businesses in the shopping center however you want to make sure the landlord does not allow too many competing restaurant users. Make sure to get an exclusive clause in your lease that prohibits the landlord from leasing to competing businesses that sell similar products & services as yours. 

Assignment & Sublease Clauses

You want to negotiate to have the ability to assign or sublease the remaining lease term in the event you want to sell the business or if things don’t work out as planned. 

Space Delivery

You need to have in writing how and in what condition will the landlord deliver the space. The space will either be in shell condition (never been built out or occupied) and need a complete build out OR it will be a 2nd generation space that was built out and occupied before.

Is there a tenant improvement allowance? How old are the HVAC units and who is responsible for maintenance and repairs?

 

Free Austin Skyline Images & Photos

There are over 1 million people in Austin, Texas. Austin is one of the fastest growing cities in the country and is the 11th largest city in the U.S.

Over the last few years the Austin skyline has changed tremendously with buildings such as The Independent, Austonian, and Frost Bank Tower competing to be one of the tallest buildings in Austin. As business continues to boom in Austin the Skyline continues to change.

I love to take photos and drone footage especially in downtown Austin. This page contains skyline photos and images from Austin, Texas and the Austin downtown area which are available for free. All I ask is that you give me credit for the photo via a link to my website.

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Gyms & Fitness Centers in Downtown Austin

If you live and/or work in downtown Austin you know the entertainment, shopping, and eating options are plentiful. Also the convenience of having everything within a short walk, bus ride, or scooter ride makes it easy to get around. 

If you are a fitness fanatic then you probably want to know where all the gyms in downtown Austin, Tx are located. Well we decided to make it easy on you. Below is a complete list of all the best gyms and fitness centers in downtown Austin, Tx.

Lists of Gyms in Downtown Austin

1. Life Time Fitness – 907 W 5th St #201, Austin TX 78703
2. Golds Gym – 115 E 6th St, Austin, Tx 78701
3. Mecca Gym & Spa – 524 N Lamar Blvd #300, Austin, Tx 78703
4. Castle Hill Fitness Gym & Spa – 1112 N Lamar Blvd, Austin, Tx 78703
5. Ro Fitness Downtown – 74 Trinity St, Austin, Tx 78701
6. The Bare Code – Downtown – 400 Nueces St, Austin, Tx 78701
7. Barre3 – 115 Sandra Muraida Way, #103, Austin, Tx 78701
8. RIDE Indoor Cycling – 2nd Street District, 117 Lavaca St, Austin, Tx 78701

 

Josh Daspit thanks for following me on Twitter! https://t.co/Qoncn6tern

Josh Daspit thanks for following me on Twitter! https://t.co/Qoncn6tern

— Nathan K Smith (@AustinTenantAdv) September 9, 2019

from Twitter https://twitter.com/AustinTenantAdv

Rollingwood Center Office Space – 2500 Bee Caves Rd Austin Tx 78746

Rollingwood Center consists of 3 Class A Office Buildings with a combined total of 341,400 sf of office space located in Southwest Austin at the corner of Bee Caves Rd and Mopac. If you are looking for nice office space with a ton of amenities, and in a great location minutes to downtown Austin this is worth checking out. This location provides easy access to many of the festivals in Zilker park such as ACL, 4th of July, and the annual Kite Festival.

Building Information

• Building 1 – 4 stories with a total of 147,900 rentable sf
• Building 2 – 3 stories with a total of 66,400 rentable sf
• Building 3 – 5 stories with a total of 128,000 rentable sf
• Total Rentable Square Feet of Office – 341,400
• Typical Floor Size – 22,000 to 37,800 sf

Parking

The parking ratio is 2.82 / 1000 sf. Covered parking is available.

Building Amenities

• Hike and Bike trail access
• Ceiling to floor windows
• Access to gym located in building 1

Location

The address is 2500 Bee Caves Rd, Austin Tx 78746. Located at the corner of Mopac and Bee Caves Rd

Transportation Information

• Minutes to downtown Austin and Zilker Park
• 20 minutes to Austin-Bergstrom International Airport

Cost to Lease Office Space at Rollingwood Center

Base rates here are around $35 plus $17nnn. Expect to pay somewhere between $48 to $50 sf gross.

Available Office Space

Interested in leasing office space at Rollingwood Center in Austin? Give us a call at 512-861-0525. If they don’t have what you are looking for there we can help you locate other class a office spaces in southwest Austin.

6 X Guadalupe – 400 W 6th St Austin Tx 78701 Office Building

6 X Guadalupe is a Class A Office Building also with a mixture of residential and retail space located in Downtown Austin at the corner of 6th St and Guadalupe. If you are looking for nice office space with a ton of amenities this is worth checking out. Once completed it will be the tallest building in Austin Tx.

Building Information

• Total Rentable Square Feet of Office – 587,780
• Total Rentable SF of Retail Space – 42,000
• 349 apartments
• Number of Stories – 66 (32 office & 34 residential
• Typical Floor Size – 30,150-31,115

Parking

The parking ratio is 2.82 / 1000 sf. There are 285 free covered spaces available

Building Amenities

• 11,500 sf of amenity space complete with fitness Center, building Conference Rooms, tenant lounge
• 24,000 sf of outdoor amenities

Location

The address is 400 W 6th Street, Austin, Tx 78701. Located at the corner of Guadalupe St and 6th st.

Transportation Information

• 30 minutes to the Austin Bergstrom International Airport
• 15-20 minutes to the Domain & Arboretum

Cost to Lease Office Space at 6 X Guadalupe

This has not been established yet however I anticipate them to be inline with other downtown austin office space rates of $60 to $70 sf gross.

Available Office Space

Interested in leasing office space at 6 X Guadalupe in Austin? Give us a call at 512-861-0525. If they don’t have what you are looking for there we can help you locate other class a office spaces in downtown Austin.

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

— Nathan K Smith (@AustinTenantAdv) September 2, 2019

from Twitter https://twitter.com/AustinTenantAdv

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

— Nathan K Smith (@AustinTenantAdv) September 1, 2019

from Twitter https://twitter.com/AustinTenantAdv

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ftiRp2

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ftiRp2

— Nathan K Smith (@AustinTenantAdv) September 1, 2019

from Twitter https://twitter.com/AustinTenantAdv

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

— Nathan K Smith (@AustinTenantAdv) August 31, 2019

from Twitter https://twitter.com/AustinTenantAdv

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

— Nathan K Smith (@AustinTenantAdv) August 30, 2019

from Twitter https://twitter.com/AustinTenantAdv

Are Commercial Lease Rates Negotiable?

It depends.

In most cases commercial listing agents will typically quote a rate that is a little bit higher than what the landlord is willing to take. At the end of the day it doesn’t hurt to offer less, however if you low ball they won’t take you seriously. It’s also important that you understand what market conditions are and what the landlords motivation is.

For example If the landlord is trying to sell the commercial building they most likely will want to keep the rates as high as possible as the monthly rents paid by tenants will dictate the market value of the building. Lower lease rates reduce the NOI of the building. Find out if the building is currently for sale. If it is then you know to focus on other concessions like rent abatement.

Also, In a hot market where landlords have a lot of interested parties they may be less likely to negotiate on the lease rate. If you really want to lease the space you may not have a choice but to pay the quoted rates.

Don’t just focus on commercial lease rates. Too many tenants make this mistake. Just because you got a lease rate that is lower than what they were quoting does not mean you got a good deal. There are a lot of other concessions to be had in commercial lease negotiations.

 

 

 

 

Commercial Vs Residential Real Estate – What is the Difference?

If you are getting your real estate license and not sure if you want to have a career in commercial real estate vs residential real estate then you will want to read this post. There is a difference between the two and it’s important that you be aware of them. 

Below we will touch on some of the main differences of commercial vs residential real estate however keep in mind there are many more.

Education

In Texas anyone that wants to represent buyers, sellers, tenants, landlords, and tenants whether commercial or residential has to get a real estate license. The basic education requirements for this are the same for both.

The core curriculum of the Texas real estate license weighs heavily on the residential aspects of real estate. If you want to get more commercial real estate education you will have to pay for 3rd party courses through CCIM or others………..and good ole on the job training. Finding a good mentor is key.

Also there are many types of commercial real estate to learn and the nuances of each are different. 

Having a college degree may help you get your foot in the door with some commercial real estate brokerages however it’s not necessary. Some will say that you have to have a college degree to be a commercial real estate agent however I know plenty of commercial brokers that don’t have degrees. However if you want to increase your chances of being hired by a big commercial real estate firm then get a college degree.

Type of Clients You Deal With

In residential you are mainly working Business to Consumer (B2C) with individual consumers who want to buy, sell, or rent homes as your main point of contact. 

In commercial real estate you are working Business to Business (B2B) with your main contacts being business owners, CEO’s, CFO’s, COO’s, Operations Managers, and in many cases office managers and/or administrative assistants.

If you don’t like cold calling businesses then you might stick with residential.

How Long Deals Take

The sales cycle is much longer in commercial real estate.

In residential once you find a house you like, make an offer that gets accepted, you will typically close in 30 days or less. Also depending on the market you are in you only get 3-7 days for due diligence to complete and review the inspection report and get pricing on any repairs needed.

Depending on the type and size of space, market, scope of work needed, zoning requirements, etc., commercial real estate transactions can take anywhere from 30 days to 12 months or longer. In most cases the minimum due diligence time frame is 30-45 days. A more complex transaction could require many months of due diligence

Ramp Up Time to Start Making Money

In residential you typically get paid commissions at closing. Because of the shorter sales cycle you are able to make money more quickly.

Because the sales cycle is longer in commercial real estate it will take you much longer to make money than in residential. In commercial leasing you typically get paid half of the commissions within 30-60 days of lease signing and the other half when the tenant moves in. If buying commercial you would get paid at closing however keep in mind how long the deal takes to close from start to finish. I’m not saying it’s not possible to make money sooner in commercial however in most cases it’s a good idea to at least have 6-12 months of living expenses set aside. If you are a quick learner and diligent about prospecting you have a better chance of making money sooner.

Work Hours

Commercial real estate agents mostly work during business hours. Yes there maybe times where you work after hours or on weekends………however most work is typically done during the business week days.

This is because you are working with businesses.

Residential agents work with consumers who may not be available to see houses until after work or on weekends. So if you don’t want to work a lot of evenings and weekends then residential real estate is not right for you.

How Much You Can Make

You will hear people say you can make more money in commercial real estate than in residential. I don’t think that is totally true as I know people who do very well in residential.

I think selling residential properties is easier than commercial however regardless of which you choose you still have to prospect and generate leads. No leads, no sales or leases. 

Most people are lazy. If you work hard every day to continuously learn your craft and are constantly networking, cold calling, prospecting, and work in real estate FULL time, you will do well.

To make good money in real estate as a broker or agent you have to be in and around the business FULL time. You will not make good money being a part time agent.

Conclusion

Above we have only touched on some of the main differences of commercial vs residential real estate. 

Commercial real estate transactions can be more complex and take longer to close from beginning to end, which means it takes longer to make money.

However you have to decide for yourself which is the best route. Becoming a commercial real estate agent does not mean you will make more money. No matter which you choose you can make good money…………ONLY if you work hard at it!

 

 

 

 

 

 

 

 

1,233 SF Short Term Office Sublease For Rent in Northwest Austin

If you are a startup or newer company that needs the flexibility of a short term office lease then you might want to check out this 1,233 sf office sublease in Northwest Austin.

In the Northwest Austin metro the office market is very tight and most landlords won’t do any leases less than 3-5 years. This sublease only has 21 months of term left so this is perfect for companies that are just getting started and not ready to commit to long term contracts.

This space is move in ready and all utilities are included in the rate. If you need to lease office space in Austin and need a short term lease give us a call at 512-861-0525

Details of This Northwest Austin Office Space Sublease

Size: 1,233 Sf

Layout: Reception, 5 offices, open area for desk, wet bar

Building Name: Synergy Plaza South is a 3 story professional building with common are lobby and bathrooms

Address: 11940 Jollyville Rd, Suite 320-S, Austin Tx 78759

Rental Rate: $29 sf gross (this includes electric and janitorial)

Sublease Expiration Date: May 31st, 2021

Floor Plan for Suite 320-S at 11940 Jollyville Rd

Contact Us About This Northwest Austin Office Space Sublease

For more details about this NW Austin office space sublease call Nathan K Smith at 512-861-0525

If you need to rent Austin office space in other areas let us know and we can help you find the perfect space at no cost to you.

7000 North Mopac Expressway – Plaza 7000 Office Rental Guide

Plaza 7000 is a Class A Office Building located in Northwest Austin at the corner of Far West Blvd and Mopac. If you are looking for nice office space with convenient access to major highways, hotels, shopping areas, and restaurants this is worth checking out. It’s great for small to medium size businesses.

Building Information

• Total Rentable Square Feet – 155, 076
• Number of Stories – 4
• Typical Floor Size – 40,629

Parking

The parking ratio is 4 / 1000 sf. There are 285 free covered spaces available

Building Amenities

• Onsite deli
• Fitness Center
• Building Conference Rooms

Location

The address is 7000 N Mopac Expressway, Austin, Tx 78731. Located at the corner of Far West Boulevard & Mopac Exp.

Transportation Information

• 30 minutes to the Austin Bergstrom International Airport
• 20 minutes to downtown Austin
• 10 minutes to the Domain & Arboretum

Cost to Lease Office Space at 7000 N Mopac

Current quoted lease rates are $30 + $15.05 nnn. What that means is if you leased 4,000 sf your monthly rent would be $15,000 per month (4,000 sf X $45.05 sf / 12)

Available Office Space

Interested in leasing office space at Plaza 7000 in Austin? Give us a call at 512-861-0525. If they don’t have what you are looking for there we can help you locate other class a office spaces in NW Austin.

What is a Gross Lease in Commercial Real Estate?

A gross lease is a type of commercial lease in which the tenant pays a flat rental fee. The rent paid is inclusive of all operating expenses such as taxes, insurance, common area maintenance charges, janitorial services, and utilities…. which are paid for by the landlord.

Not all commercial properties are managed the same way so be sure to ask all the right questions to be sure of what rent and operating expenses you are responsible for……….and get everything in writing! 

Benefits of a Full Service Gross Lease

• Less complex for tenants to understand than other types of commercial lease rates
• Landlord is responsible for any increases in operating expenses
• Easy for tenant to for forecast expenses
• Eliminates any worry about unexpected building costs

Disadvantages of a Gross Lease

• Tenants pay the same rent regardless if the operating costs are reduced for whatever reason

Definition of Gross Lease

Above we have defined the basics of a gross lease in a commercial real estate transaction. Depending on the market, type of space, and landlord commercial properties are managed differently. When negotiating a commercial lease be sure to ask if janitorial and utilities are included. Also confirm if it’s a true gross lease or one that incorporates a “base year”.

Also be aware that as commercial lease operating expenses become more unpredictable (mainly taxes) landlords are changing to triple net (NNN) leases rather than gross leases. This makes it easier for them as they are able to pass along 100% of the costs associated with managing commercial properties. Whether you leasing office space, retail space, or warehouse space most will be NNN leases.

Brashears Miller, PLLC thanks for following me on Twitter! https://t.co/BqqULU27jU

Brashears Miller, PLLC thanks for following me on Twitter! https://t.co/BqqULU27jU

— Nathan K Smith (@AustinTenantAdv) August 13, 2019

from Twitter https://twitter.com/AustinTenantAdv

Traditional Office Space VS Coworking: Which is More Expensive?

It depends on the market you are in and the number of employees your company has, however in general if your company has more than 5 employees it’s typically about 20% to 30% more expensive to lease coworking space.

At the end of the day you have to evaluate the total cost of leasing office space as it’s more than just lease rates. You also have to evaluate the value of flexibility, amenities, and day to day operations.

Why is Coworking Space More Expensive?

Coworking providers like WeWork rent space directly from building owners (aka landlords) typically for 5-10 year lease terms. Even though they negotiate and receive a tenant improvement allowance they still significantly come out of pocket to complete the build-out and furnishing of their spaces. In addition they have full time staff on duty for day to day operations. To recoup their investment AND to make a profit they typically charge on average 20% to 40% above the rents that they pay to the landlord. 

Should I Rent Traditional Office Space or Coworking Space?

If you are unsure about the future of your company whether it will experience rapid growth or be able to survive the next 12-24 months then you should stick with coworking. If you only have 5-10 employees then coworking might be the least expensive alternative.

However if your company is stable or growing and you have more than 10 employees then renting traditional office space will probably be better suited for your needs.

Small 1,276 SF Short Term Office Space Sublease Bee Cave Tx

If you are a startup or newer company that needs the flexibility of a short term office lease then you might want to check out this 1,276 sf office sublease in bee cave Tx.

In the Austin metro the office market is very tight and most landlords won’t do any leases less than 3-5 years. This sublease only has 9 months of term left so this is perfect for companies that are just getting started and not ready to commit to long term contracts.

This space is move in ready and all utilities are included in the rate. If you need to lease office space in Bee Cave tx and need a short term lease give us a call at 512-861-0525

Details of This Bee Cave Tx Office Space Sublease

Size: 1,276 Sf

Layout: Reception, 5 offices, wet bar

Building Name: Villa di Calabria Office Park is a 3 story professional building with common are lobby and bathrooms

Address: 11719 Bee Caves Rd, Austin Tx 78738

Rental Rate: $27 sf gross (this includes electric and janitorial)

Sublease Expiration Date: May 31st, 2020

Contact Us About This Bee Cave Office Space Sublease

For more details about this Bee Cave office space sublease call Nathan K Smith at 512-861-0525

Floor Plan for Suite 101 at 11719 Bee Caves Rd

If you need to lease Austin office space in other areas let us know and we can help you find the perfect space at no cost to you.

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

Flavius Aetius thanks for following me on Twitter! https://t.co/mmo6ft1gxu

— Nathan K Smith (@AustinTenantAdv) August 5, 2019

from Twitter https://twitter.com/AustinTenantAdv

Things To Consider Before Leasing Commercial Property

Leasing commercial property is much different than renting an apartment. A commercial lease contract is a complex document that is negotiable however typically heavily favors the landlord. There is a lot more to leasing commercial space than just finding a space. You have to know what you are doing to ensure success. If you don’t then hire someone that can level the playing field against the landlord and Landlords’s agent.

Below are a few things to consider before leasing commercial property.

Get your financials in order

Landlords are going to ask to see your financials when leasing commercial space so please don’t get offended when they do. It’s part of doing business. Before they agree to give concessions like tenant improvements they want to make sure you are financially stable. Many will ask to see these BEFORE they respond to your proposal or offer.

Ask the Landlord a Lot of Questions

It’s important that you understand who owns the building, who does the leasing, who the property manager is, etc… Here is a list of questions to ask commercial landlords or listing agent when touring commercial properties.

Ask Yourself the Right Questions

You need to understand your current and future needs so here are a few questions to ask yourself before leasing commercial property. For example How much space do you need now and within 12-24 months? Do you need room to expand? What is the maximum you can afford each month? What is the longest lease term you can sign? Don’t let the landlord talk you into to paying more than you can afford or signing a lease longer than makes sense for your business.

Get to Know the Lingo

As you talk to commercial real estate agents they are going to throw out a lot of commercial real estate terms and definitions. You need to be familiar with these so you can negotiate effectively and not make mistakes

Understand the Types of Commercial Leases

Some commercial properties are referred to as NNN leases, Gross, Modified Gross, etc. Do you know what this means? If not check out our post that talks about the different types of commercial leases.

How Long of a Commercial Lease Term Makes Sense?

The length of lease term in a commercial lease typically depends on the market you are in, the existing condition of the space, and the landlords preference. Landlords want you to sign as long of a lease as possible. If you are a new business then try to get a shorter term lease (less than 2 years). If you are a stable business then a 3-5 year lease makes sense. The longer the lease the more concessions you will be able to receive. The more improvements needed on a space the longer lease term the landlord will require so they can recoup their initial costs. At the end of the day you need to understand your current and future needs and agree to a lease term that makes business sense.