Unfortunately, there’s no quick right or wrong answer to this. The appropriate length of lease for a business is a challenging decision and will vary based on a number of factors. But in every single instance, this is when the experience and expertise of your agent will show its value.
Ask yourself these questions – and share your answers with your agent, or look to him for answers where applicable. Doing so will ensure that you’re both on the same page in terms of your needs and wants.
How stable is my business and expected business volume? Is it likely to expand, downsize or stay constant in the future?
How flexible is my lease if space changes are likely? How likely is it that my proposed landlord can accommodate my future needs within the existing portfolio?
What kind of tenant improvements are necessary with this space, and who’s paying those costs? If it’s me, how long will I be expected to pay that extra cost? Will I have to write a check or can I pay it off in added rent over the lease term?
How important is location to my business? Is there an immediate or potential advantage resulting from rail access, proximity to labor, the freeway, overnight trucking terminals, etc.?
What, if anything, will I save if I sign a longer lease term?
Who is my landlord? This is essential information because it is the landlord who dictates the level of property management services he or she will employ to manage all of your property needs during your occupancy. Also consider how likely it is that this property portfolio will be sold to a new ownership group. Having some idea of this can either add some level of risk depending on the circumstances.
Unsure of the answers to these, or do you still have questions? You should. Download our free 13-Step Lease Process Guide for more details about the leasing process, and contact us today for a consultation.