If you are about to move your business into a new location or even to open a new one in an entirely new location, the biggest challenge you’ll face is the cost of commercial space. And it’s not even as simple; there’s no single answer, as various factors influence rent prices. It depends upon many other factors that landlords and tenants have to ponder before signing the contract.

It doesn’t matter if you are a small business owner in need of renting commercial space for the first time or you are quite experienced in dealing with the leasing terms; having a better understanding of it will let you make better financial decisions. Don’t get overwhelmed; we’ll break down the top 7 factors that may influence the commercial rents. Also know about commercial, Industrial, and Business Spaces.

1. Location is Non-Negotiable

Location is the most important factor affecting the rates of commercial spaces. Let’s discuss this, like imagine if you own a cafe on a busy downtown street corner, you’ll be paying much higher as compared to a small restaurant in a quieter suburban mall.

By this, you can say that the more popular the location is, the higher the rent you’ll have to pay because high traffic areas bring some pros alongside attracting potential customers.

2. Size of the Space

The next thing that influences the commercial space rent after location is the sizing. Just like location, the bigger the size you need, the more you have to pay for it. Do remember that it’s not always even about the size; the layout also matters, not just the size.

However, open flooring can be a cheaper and better option as compared to the segmented areas; it completely depends on your business needs.

Make sure you always compare the average commercial rent per square foot when touring multiple properties, so you won’t end up with the most expensive one.

3. Type and Condition of Property

We are aware that not every commercial property is created the same. Modern buildings often include modern facilities like smart security systems, upgraded HVAC systems. But at the same time, they’ll come with higher rent.

These features can save money in the long term by reducing renovation and repair costs.

4. Leasing Terms

The next one that impacts the commercial rent is the fine print in your lease. Let us tell you that short-term leases do come with high rates because every landlord goes for stability. On the contrary, long-term leases usually offer lower rates, but limit flexibility in moving your business.

Even though a few leases also pass on the expenses like property taxes and maintenance, oftentimes called triple net (NNN) leases, which can significantly increase the overall cost.

5. Demand in the Market

The next thing is the demand. If it’s high in your area, rent will rise. It is very much influenced by the local conditions of the market. For example, retail units in the fast-growing areas often experience increases in rents.

If your business is set to move into areas where vacancy rates are high, it’ll have lower prices for tenants.

6. Amenities and Services

You’ll be surprised to know that amenities or extra services can also impact the cost of the commercial lease. Facilities like 24-hour security, high-speed internet, onsite parking, elevators, or even a building concierge may increase the rental prices.

7. Power to Negotiate

We understand that many tenants hesitate to negotiate. But you’ll be surprised to know that it’s easy to discuss the pricing, especially when you are about to sign the long-term lease.

But it will entirely depend upon the flexibility of the landlord and the market rates. However, never be shy about comparing the offers and pushing for better commercial lease pricing.

Final Thoughts

We hope that now you have a better sense of understanding about the factors affecting commercial rent. This is how you can ensure to search for the best place that meets your business needs while staying within the budget. The best way to do this is to research, go for multiple options, and try to negotiate better. Also, remember that the extra amenities and facilities are going to add more to the rent.

At the end of the day, it’s hard but not impossible to find the right balance among the location, cost, and flexibility with long terms to make sure the investment in commercial space is worth every single penny.

If you are still struggling to find the best commercial rental space for your business, no worries, as 25 Van Zant offers the right space within your budget. Contact us right away.

Frequently Asked Questions

What is meant by a commercial space?

Any space that is designed to be used for business activities, like offices, coworking spaces, shopping centers, retail stores, service stations, cafes, bars, and restaurants, is known as commercial space.

Does commercial mean for profit?

Yes, oftentimes commercial property is leased to a business that is conducted for the express purpose of making profits.

What’s the difference between commercial vs. residential properties?

Commercial properties are basically constructed to serve business purposes; however, residential properties are where people tend to live happily.