Step 1: Get a Good Broker

Step one in moving your office, get a good broker. The first step in moving your office from one commercial area to another commercial space is to get a good broker. Now, you may say, why do I need a broker? There’s the internet. There are websites, I can call landlords directly. You need a local guide, someone with local knowledge and local connections in the neighborhood that you want to move your office into, to give you the best advice possible. Getting a good broker is just as important as getting a good lawyer.

Step 2: Finding a Location 

The second step in moving your commercial space is finding a location. Once you have found a good broker, the next step in moving your commercial space is to find a good location. That location must be zoned for your needs. That location must have adequate utilities for your needs, and needs to be convenient from a commuting and a delivery perspective. Finding a location is literally everything in real estate. As a good broker will tell you, the three key pieces of real estate are location, location, location.

Step 3: Letter of Intent 

The third step of moving your commercial space is settling on a letter of intent. Just like buying a business, a letter of intent or a deal memorandum to lease your commercial space is the first step and the most important step to hammer out the business requirements and business terms of that lease. It should have key terms, such as price per square foot. It should include length of term, any options, any guarantees. How many free months of rent do you receive once you move in? All of these terms need to be encapsulated in a letter of intent. Once the deal terms are done, you will move on to a formal lease. But first, it’s best to know what you’re getting when you ask for that lease.

Step 4: The Lease 

The fourth step in moving your commercial space, the lease. Once the LOI or letter of intent is formalized and the business terms are set, you should receive a formal commercial lease. That formal commercial lease will have not only the business terms of the letter of intent, but will also have other legal terms, including default provisions, how long you have to pay, any grace periods, any interest charges, and may also include terms and conditions for a guarantee. It is very important that you seek out legal counsel along of the counsel with your broker to determine whether or not the lease should be reviewed or executed or negotiated. Please keep in mind a lease can always be negotiated. And if a lease cannot be negotiated, you should not take the space. A lease is a contract between you and the landlord and is formal and needs to be in writing and have all the formalities of any other important legal document.

Caveat: The Guarantee 

A caveat to moving your commercial space, the guarantee. The guarantee is a very important part of moving your commercial space and the lease that you are intending to sign. That guarantee puts you the business owner personally on the hook for any failure to pay or any other defaults. Most leases and guarantees do not require the landlord to seek payment from the tenant, which will most likely be your business, organization or entity. They can go directly to you personally. There is a variation on a guarantee called a good guy guarantee, and you should push in the letter of intent and in the lease that you receive and sign a good guy guarantee. A good guy guarantee allows you to terminate the lease early and to avoid the liability under the guarantee by paying a certain amount of month’s rent and delivering the space in a broom, clean, swept condition.