Commercial Real Estate with JP Humphrey.

• When did you develop your interest in real estate?
• Why did you decide to become a licensed Commercial Agent to assist business owners and landlords?
• At a high-level, the typical process to find and secure leased commercial real estate space:
  • Define Requirements (including type of space, size of space, location, and other important criteria)
  • Research and identify potential areas for the location of your small business.
  • Set target preliminary business open date.
  • How long before planned open date should I start my search? JP recommends approximately 8 months. 
  • When should I engage an agent?
  • Work with agent to begin search. Agent conducts research and provides list of potential properties to consider.
  • Visit potential sites or locations for your small business.
  • Select site(s) to negotiate. LOI may be presented. May need pitch deck or Business Plan.
  • Negotiate lease.
  • Begin space finish-out.
  • Occupy space.

• Why should I use a Commercial Agent to help me find space for my business?
  • Access to market information
  • Knowledge of the process
  • Experienced with negotiations
  • Represents you (if Tenant Representation) and brokers the deal
• Please explain Tenant Representation. Why is it important?
• What is your role and responsibility in the process?
• Please explain a typical Triple Net commercial space lease:
  • A “triple net lease” or “NNN” lease means that as a tenant your monthly payment also includes a prorated (based on the square footage of the space you are leasing relative to the entire center or building) portion of the entire property’s expenses for liability insurance, common area maintenance, and property taxes.  While the base rent is typically negotiable, the triple net expenses usually are not.
• Please explain how Tenant Improvements (provided by landlord):
  • The landlord may be willing to provide money or other concessions to help you finish out the leased space to your specifications and needs.
• Important Commercial Lease Clauses (please share your thoughts and experiences):
  • Flexible Length – 3-year, 5-year, 10-year, Renewal Options (tenant’s option)
  • Lease Termination or “Kick Out” provision
  • Free Rent – including asking for free rent in future years
  • First Right of Refusal on Contiguous Space
  • Limited Personal Guarantee – you may be able to negotiate a phase out of your personal guarantee responsibility.
  • Lease Assignment & Subletting
  • Co-Tenancy Clause (allow for remedies if anchor tenant departs the center)
  • What else should business owners consider when negotiating a commercial lease?
    • JP also explains points to consider related to the HVAC system for the space.
• Note: Hire an attorney to review your lease before you sign it!
• What should I look for when engaging a Commercial Agent or Broker to represent me? 
• If my business will require commercial space, where should I start? What should I do first before I start looking at potential spaces?