Commercial property has become a hot commodity for both existing business owners and new ones who want to tap into Calgary’s booming business community.
Finding both a premise to set up your business and the right commercial location for your business can be challenging. Business owners who are looking to locate may have to be creative in the approach they take when considering a commercial lease.
Some companies are finding that they also have to evaluate how they use the space they do lease. Using a touch of innovation may be required. This could include allowing more employees to work from their home or even to use shared office space for salespeople who are largely out of the office most of the time.
Many commercial brokers see the need for companies to become more flexible when trying to find commercial space when the market is especially tight. The current national vacancy rate is hovering around 5% and even lower in Calgary, which is even less than the previous quarter. Vacancies across Canada haven’t been this low since the mid 1980’s.
Lower vacancies mean that rents have and will become higher as a result. It’s the resulting reality of the simple matter of the usual supply and demand business model. Developers are working to address the situation to meet Calgary’s growing commercial space needs, but it takes time before projects are completed.
Here are some tips to help you cope with Calgary’s booming commercial market.
• Plan Now – If you need to re-locate your business or plan to set up a business, than the best advice is don’t delay looking and start talking to brokers as soon as possible to get the process underway. This will also allow you a greater ability to negotiate with the landlord and set up what you need for your business. Most experts suggest the process should be initiated 12-18 months prior to your move or start up.
• Use an Experienced Agent – If you don’t have the expertise in negotiating the best possible deals with landlords than use someone who can best represent your interests.
• Longer Leases – Don’t be afraid of committing to a longer lease even if you don’t necessarily think the space you just leased won’t be sufficient down the road. You can always arrange to sublet your lease if you have to re-locate. A prospective commercial renter will be more attracted to subletting if there is more time left on the lease.
• Know your Needs – Make sure you know that your business plan needs reflect the requirements of your future growth or expansion. This will affect the amount of space you require, and maybe even the type of property class you require if your business plans to incorporate new technical features.
• Have More Options – ‘Don’t put all your eggs in one basket’ like the old timers say. If you place all you hopes in a single location and the deals go south you could be in a heap of trouble. Always have at least one other commercial property option as your Plan ‘B’.
• Consider the Entire Lease – Many businesses who rent commercial space sometimes fixate too much on the cost per square foot. Savvy owners realize that the commercial lease is a large document should be reviewed thoroughly as you may be able to offset your costs by renegotiating lower costs on other portions of the lease which may be of less concern to the landlord. Be creative and scour the lease to look for possible savings.
Photo by cityprojectca
