Do you have a property that you want to lease for retail purposes? As a property owner, retail leasing might be a confusing or stressful process. The process for leasing is important because, if you’re not careful, you might lose money. In this article, we’ll teach you a few tips that’ll simplify the leasing process. These are basic tips that commercial property agents in Melbourne have taught me. I hope these pointers can help you lease your property successfully.
Make the Retail Property Attractive
The right aesthetic designs will attract the right potential tenants easily. However, the design elements for the property’s outdoor and indoor space are not enough. Prospective tenants are looking for attractive and functional buildings. That’s why the property needs to have proper ventilation and easy access – both to the front and rear of the building. In addition, safety features like reliable water supplies, and the provision of fire extinguishers are essential for many tenants. Remember that even though you lease the property to a client you, as the landlord, are required to make regular improvements to the property.
You can discover what factors attract specific potential tenants to retail property in your area. Demographic factors (filters used on online listings) like location and desired facility requirements show the preferences of potential customers. It’s important to remember that the real estate industry is very competitive. Conduct good research, get customer data, and use these results to attract the right renters. You can also use these concepts to keep an eye on your competitors’ activities.
Understand the Different Commercial Retail Leases
While it’s important to negotiate a favourable retail lease, landlords must be aware of – and obey – tenancy laws. There are different types of lease agreements that apply to commercial properties. Usually, commercial lease terms are different from the terms of apartment rentals. You always have to check what’s legally required in your area, but below are the most basic types of retail leases, that seems to be fairly common.
Single Net Leases
Under the Single Net Lease type, renters take responsibility for both utility bills and property tax. However, it’s the real estate agent or landlord that pays for insurance and repairs of facilities in the retail property. This type of retail lease is also called the Net Lease.
Double Net Leases
Under this type of retail lease agreement, the property owner takes care of maintenance and repairs expenses. However, the tenants share the cost of utilities, insurance premiums, and taxes on the property. Double Net Leases are also called Net-Net leases.
Triple Net Leases
With a Triple Net Lease, retail property tenants are responsible for all expenses that occur in the building, apart from structural repairs. The Triple Net Lease is a straight-forward agreement between both parties.
Modified Net Leases
The Modified Net Lease is a lease type that shares the operating expenses and maintenance costs of the structure between renters and their landlords. Under structural costs, bills for utilities, and common area maintenance (CAM) might be included. Other expenses include taxes and insurance of the property. This type of retail lease is also called Full Service Gross.
Negotiating Of Terms and Conditions in the Lease Agreement Document
It’s good to work with professionals before listing your property for rent. Lawyers and commercial real estate agents understand these terms and conditions better than most landlords.
The landlord might be guilty of inserting specific clauses into the lease document when they are against the tenancy law. So, drafting or signing a lease agreement without understanding the law might be counter-productive. You can find great agents and lawyer in your local directory. Most of them have access to lease term rate and databases of potential tenants.
Some basic Terms to Expect in Retail Leases
- Basic Terms: While the ‘lessor’ means a property owner, the lessee is the tenant that makes payment for the retail space.
- The Basic Rental Rate: In most regions, the rental rate value is calculated per square foot. Sometimes, it’s a percentage of the value of gross sales.
- Responsibility: Regardless of the retail lease type, responsibilities are shared between tenants and property owners. These expenses include insurance premiums, property tax, repairs, renovations, and utility bills.