Momentum - Business to Business Online Magazine MOMENTUM April 2018 | Page 30

Hometown Stories Top 5 things you ask when leasing a commercial property By: Deborah Bly [email protected] www.theblyteam.com My good friend Derek Hughes used to work as assistant to the City manager for League City. Since then he has moved on to become a commercial Real Estate agent. His prior experience with the city and desire to educate and council, brings great value to his clients. 3. Depending on the kind of business you open, you are going to be subject to various regulations. If you were to sell alcohol as an example, the TABC needs a business address on file to begin the certification process... but at the same time you must have your location and lease nailed down to insure no one else takes it...before you get your permit. 1. One of the #1 things to consider before jumping into a lease is... does it make sense for your business? Derek brought up a great point about a client that came to him interested in opening a coffee shop. Ask yourself first and foremost: how much profit you want to take home per month? How many cups of coffee must you sell in a day to do that? You must cover the cost of coffee and monthly overhead before you generate the profit that you want to have as income. In this case would you have a drive through? Starbucks, for example, generates more income from drive through and mobile app-based purchases than people who come in and sit down. 4. Most business are going to need a certificate of occupancy. This means an inspection from the Building Department and the Fire Marshalls’ office. During the inspection period they will evaluate the location using the international building code and fire code to determine if it is fit for your business use and safe for the pubic. Failure to do so can result in shutdowns, citations, and/or other punitive measures. 2. Are you aware of expenses necessary for the business that are completely outside of rent? These items include utilities, insurance, security systems, business class internet, signage, installation fees for your signs, advertising to drive customers to your business...the list is much longer than most people really think. Do you know what “base rent” and “triple net” are? Do you know that on most retail leases the tenant is responsible for the HVAC system, as well as what is needed to get a certificate of occupancy? 5. When in doubt contact an experienced local commercial agent, who has the network to get answers regarding ordinances and regulations for the specific area. Know what you are supposed to do and do it right. At the end of the day, whether experienced or not, this is a big financial decision. Get consultation on all the factors that can leave you unnecessarily exposed or liable in your lease. Whether a residential or commercial transaction, there is much complexity that can be detailed in a short article. Click on HomeTown Stories interview with commercial agent Derek Hughes as we share more discussion regarding weather you are ready or not to take the business plunge! MOMENTUM / April 2018 29