Execute a Commercial Property for Lease in Columbus, Ohio: Key Points
When executing commercial property for lease in Columbus, Ohio, landlords and business tenants have different perspectives and interests. Although no two leases are alike, a core set of elements typically must be addressed. Before you lease commercial property, as a landlord, consider the following preparations and information that should be factored into any commercial space for lease. And if you’re looking for more information, our full guide on how to find and lease commercial space for rent is chock full of practical tips.
What Is a Commercial Lease Agreement?
A commercial lease is a legally binding agreement between a landlord (“lessor”) and a business tenant (“lessee”) for the rental of a commercial property. A commercial lease must be executed when a business is about to rent commercial space to conduct business. A commercial lease defines each party’s rights and responsibilities to the commercial property for rent. Commercial lease agreements also stipulate terms and conditions and are often negotiable.
One of the most common aspects of negotiating a commercial for lease is the length of the term. Due to the complexity and seriousness of commercial lease agreements, the landlord and business tenant should each have commercial real estate brokers negotiate the terms on their behalf. There are also many types of commercial leases as well as legal jargon. However, a commercial broker can help guide you through each step, from finding commercial space for lease or finding tenants to ensuring the commercial lease is executed in your best interest.
Prepare Your Commercial Property for Lease in Columbus, Ohio with 7 Basic Tasks
Before you lease commercial space, you must do your due diligence and understand the fundamental components of the lease agreement.
- Learn commercial leasing laws in Ohio. Read through Ohio Revised Code Chapter 1310 to get up to speed on commercial real estate for lease transactions. Creating a commercial lease that meets all of Ohio’s legal requirements will prevent a headache down the road.
- Learn commercial leasing laws in Columbus, Ohio. In addition to learning state leasing laws, you must educate yourself on laws specific to Columbus, Ohio. For example, Columbus requires that all rental payments are withheld and deposited in an escrow account with the municipal court if a landlord fails to make necessary requested repairs.
- Understand the different types of commercial leases. Discover which option is best for you, such as a gross rent lease, a modified gross lease, or a triple net lease (NNN).
- Determine the length of your commercial lease. The standard term for commercial properties for lease is typically three to five years, but some tenants need a longer lease term.
- Research comparable commercial properties for lease in Columbus, Ohio. Understanding the market rates can help you decide on an appropriate price for your commercial property for lease.
- Calculate all involved costs. Determine all financial aspects of your commercial space to lease. Aside from the commercial lease amount, also factor in any taxes, fees, and maintenance costs.
- Ensure your commercial space to lease is ready for a new tenant. When turning over a commercial rental property from one tenant to another, you must make sure the commercial space for lease is presentable and up-to-date. Make pertinent updates to fixtures, lighting, appliances, etc. Give the space a deep cleaning. Ensure the space is secure; change the locks or deactivate the past tenant’s access entry cards. Check the curb appeal; walk around the exterior to verify the grounds are presentable.
Include These Top 6 Elements in Your Commercial Property Lease
- Space: The commercial space to lease is commonly called the “demised premises.” This is the street address and the square footage of the available commercial space. This section of the commercial lease should also describe parking spaces, if applicable. The lease must clearly define these elements to protect the landlord and tenants.
- Lease Inclusions: A commercial lease agreement should always state what is included in the rental fee that is owed to the landlord. Most commercial for lease are gross leases, meaning it’s all-inclusive because the tenant pays one sum, while the taxes, insurance, and maintenance are the landlord’s responsibility; however, some leases vary. Understanding the difference is important and it’s a good idea to outline these inclusions in the rental agreement within the lease. Some of these expenses are as follows:
- Property taxes
- Commercial property maintenance
- Utilities (electricity, water, gas)
- Rental Chart: A commercial property lease will clearly state the rental amount but should also specify how the rental rate is determined for the entire commercial space lease term. You can accomplish this with a rental chart, outlining the details of the commercial property for rent. If the rate of the commercial space for rent is expected to increase, the included chart will explain the amount and timeframe.
- Alterations During Tenancy: Commercial leases are often structured long-term, such as five, ten, or twenty years. As the tenant’s business grows, they may need to adapt their commercial rental space. Determine upfront which improvements or alterations they may make with and without your approval. It’s also best to outline the process required to obtain such approval.
- Additional Provisions: A commercial property lease should be complete with nothing left for future negotiations. Be sure to include any additional provisions for the commercial space for rent, such as hours of operation, insurance requirements, and a sublet clause.
- End of Lease: Just as you laid out the types of updates the lessor may make to the commercial property for lease, it’s pertinent that you specify which alterations and improvements must be changed back before the contract ends for the commercial real estate for lease.
Provide Key Pieces of Supplemental Literature for the Commercial Real Estate for Lease
Aside from asking the right questions, keep important supplemental literature handy when negotiating a commercial real estate for lease with any prospective tenant. You have invested in your commercial rental property, and therefore, you must protect yourself. The more information you can provide, the better off you will be in managing your commercial real estate for lease and making the most of your investment. Below are key points that should be thoroughly communicated concerning a commercial real estate lease.
- Guidelines for the use of the commercial property for rent
- Insurance provisions
- Business plan provisions for any tenants
- Instructions for allowing others to use the commercial rental property
Typical Disputes with Commercial Properties for Lease
Many things can go wrong when you own or manage a commercial property for rent or lease. Disputes often arise when you lease commercial space. For example, a commercial real estate agreement can result in a dispute. Below are the most typical reasons for commercial property lease disputes, on both sides. Focusing on these areas in your commercial property for lease agreement can help prevent future lawsuits.
- Breach of commercial lease
- Rent amount increases
- Overcharging rent
- Excessive late rent payment fees
- Missed rent payments or failure to pay rent
- Hidden fees
- Maintenance fee obligations
- Property alterations and improvement options
- Property damage
- Safety and structural integrity of the commercial building
- Safety concerns
- Security deposit
- Lease renewal or termination
How to Find Tenants for Your Commercial Rental Space
Finding tenants for your commercial rental space is no small feat, but finding ideal tenants is even more difficult. How do you find tenants for commercial investment properties? Below are some effective strategies:
- Hire a commercial real estate brokerage firm. A commercial broker like The Robert Weiler Company can save you time and effort while making the process smoother and more effective. They will photograph your commercial property for lease, list it online, market it, and find tenants.
- List your commercial rental space on listing sites. Platforms like Crexi, Loopnet, Property Shark, and 42 Floors have heavy traffic, ensuring your listing will be seen. Be as detailed as possible and include lots of quality photos of the space inside and out.
- Place a large sign on the commercial building. For obvious reasons, this only works if the sign can be seen from the street. A large sign can attract many inquiries from prospective tenants looking for commercial property for lease in the area. Have a sign printed with the words “FOR LEASE” and your contact information (phone and website).
- Network in-person and online. Let local business owners know you’re seeking tenants for your commercial property for lease. Search Meetup.com for local small business owner events. You can also join groups on LinkedIn and Facebook for local business owners. Get the word out there as much as possible.
- Offer current tenants referral rewards. Referrals are the best word of mouth! If you’re happy with your existing tenants, they’ll likely know other likeminded, responsible business owners looking for a commercial rental space. Offer them rewards for referring prospective tenants to you.
Questions to Ask Prospective Tenants for Your Commercial Space for Lease
- What type of services or products does your business provide?
- How long has your business been operating?
- Who is the target market of your business?
- How soon are you looking to start leasing commercial space?
- How long do you intend on leasing the commercial space?
- What will your hours of operation be?
- Whose name would be on the commercial rental space lease?
- What kind of retrofit do you require for the property, and what timeframe do you have in mind?
Need Help with Your Commercial Property for Lease in Columbus, Ohio and Beyond?
If you try to lease your commercial rental property but find the task daunting, consider hiring an expert. With 85 years of experience, The Robert Weiler Company has assisted hundreds of landlords with their commercial properties for lease and commercial properties for rent. Our commercial leasing agents utilize advanced tools and ask the right questions to ensure that expectations are met and exceeded. No matter what type of commercial real estate for lease you have to offer, we can help you find a tenant who will improve your property’s value. From office space for lease and retail space, to warehouse leases and industrial commercial leases, or any other commercial for lease, we work with clients in every market.
In addition to helping with a commercial for lease, we can provide property management services if needed. It can be stressful for a property owner to manage leases, tenants moving in, rent collections and deposits, and in a worst-case scenario, an eviction. With a professional property management team on your side, you won’t have to worry about day-to-day tasks concerning commercial space for lease.
At The Robert Weiler Company, our staff has vast experience and expertise in our fields; we also genuinely care about the community and the success of local families and businesses. Call us at 614-221-4286 to find out how we can assist with your commercial property for lease in Columbus, Ohio, or throughout Central Ohio.