Save Money on Commercial Space with These 10 Helpful Tips

Posted on January 9, 2018January 12, 2018 by Plemmons

For every successful business, there comes a point where you outgrow the kitchen table or garage.

Getting a bigger space becomes essential for growth.

The question is, how do you find a perfect space for your business to thrive?

Know your budget. Do not go over your budget.
- Get a space that will allow you to continue growing. Be economically minded when space shopping.
Know your businesses needs.
- Different businesses will prioritize different factors. Trucking and distribution will have a different priority set compared to an IT company.
Leave wiggle room in your operating budget.
- Know the issues that may arise for your unique business.
- Keep a rainy day fund for vital equipment replacement.
Know your personal AND business credit score.
- Especially vital for newer businesses.
- In lieu of business history, a personal guarantee can sometimes gain lease approval.
Do NOT sign a lease that does not make sense for your business.
- Consider the needs of your business a timeline. Why sign a 54 month lease when you may need more space in 36 on your current growth rate?
Read. Your. Lease.
- This contract is going to be a vital piece of your business going forward. Know it inside and out.
- Ask questions! Never leave anything to an implicit meaning, ask for explicit clarification.
- Negotiate! Until you sign, many things are up for negotiation or discussion. The worst the leasing firm can do is say no.
Calculate your moving and logistics costs.
- Moving trucks, personnel, tech installation, etc. all come into play here.
- Consider moving mid-month to minimize downtime once paying rent.
Secure all items of value.
- Don’t leave tools, electronics, and other valuable items visible from the outside. Especially do not leave them in any company vehicles.
Know your subletting rules.
- Subletting from another business is a great way to get the space you need without paying the full market rate.
- It can also make you some good money if you have space to spare.
- Check with your leasing company to make sure you are permitted to do so in your lease.
Have questions? Ask them!
- The last thing a property manager wants is an unsure or uninformed tenant.

How to Get the Best Bang for Your Buck When Renting Commercial Real Estate

Posted on December 29, 2017January 3, 2018 by Plemmons

Winter is Here.

Winter

When it comes to renting Commercial Real Estate, it’s safe to say we know a thing or two.

2018 is nearly upon us, that means we are in the middle of prime moving season. For commercial and residential alike.

Moving during winter is advantageous from a financial and customer service viewpoint. On top of getting more personal attention from leasing agents, you can also find yourself in the position to get some good deals.

That is, as long as you are ready to pull the trigger.

How to save a few bucks when renting

As with most negotiations, if you play your cards right you can save a substantial amount of money renting real estate.

Here are some professional tips:

Know your number – Arrive to a showing appointment knowing how much you can spend on a space. Never start negotiations without a number in your mind.
Know your agent/landlord – You want to work with someone who has been a part of the team for a long time. Those are the ones that can give you a deal since they know their way around the business. If you get the vibe that you need someone more experienced, there is no shame in asking for exactly that.
Referrals – Tell them how you found them. Most companies will have some sort of kickback to you and whomever got you interested in the space.
A penny saved is a penny earned – Do not underestimate small savings. Fifty bucks here, seventy-five there, it all adds up. For example:
- Application Fee: $50 If you seem like a serious client, most companies will consider waiving this.
- Free Week: Offer to move in around the 20th. You may find them willing to allow you to start moving in but start paying in the new month. Potential to be moved in and operational before you are paying rent. This can be hundreds if not thousands of dollars saved.
- Ask if there are any “B-Level” units: Maybe there are more puddles in that part of the parking lot, the view is of a railroad or neighboring building, the electrical room is nearby, etc. If you are willing to compromise on small things, they may have a space that is otherwise identical for significantly cheaper. This could be result in thousands of dollars saved a year.
Know the company – Coming across as knowledgeable about the company you are negotiating with can go a long ways. It shows you are dedicated to getting a space if you put the time in researching.
Make. An. Appointment. – This is less a stickler for us than other companies. Regardless, to ensure you get the best experience from the most capable leasing agent, make an appointment. Also, it is the polite thing to do.

Finally, if the price is right and the unit works for your business needs. Be ready to negotiate. Remember, while a company may own the space, you are negotiating with a person. They likely have a number too and 80% of something is better than 100% of nothing when a unit is vacant for another month.

Plemmons Pro Tip: That works at hotels too. Past the usual check in times you can usually find a manager that will rent vacant rooms for a discounted rate rather than letting them by empty for the night.

Don’t say Plemmons Industries never did nothing for ya!

3 Simple Ways to Solve Seattle’s Rental Crisis

Posted on December 21, 2017February 9, 2018 by Plemmons

Seattle’s rental crisis cannot be solved with rental caps.

Acting as such will only make the situation worse.

Real estate is a living market.

Simply demanding that it meet demand is not sufficient.

Instituting Rent Control and calling it a day will not solve Seattle’s rental crisis.

Only when zoning laws, availability, and smart rental regulations work in tandem can Seattle’s rental crisis be dealt with.

Fix restrictive zoning

Seattle “simplified” zoning laws in 2015. Multi-Family zoning now falls into one three categories. LR 1, 2, and 3 respectively. The main difference with regards to the rental crisis is the restrictions on the number of units by overall building square footage.

At best, new construction is only allowed at a single unit per 800 sq ft. With others having a limit of one unit per 1,200 sq ft.!

Unfortunately, this creates an awkward scenario where lack of supply increases demand but developers cannot build to meet all the demand even if it would make financial sense.

Simply put, Seattle must allow for increased density in construction to supply the studio and one-bedroom apartments required to solve the crisis.

The case for Rent Stabilization

If you recall from our first piece, Rent Stabilization is different from Rent Control as it doesn’t set the maximum price units can rent for rather, a maximum rate for yearly rent increases.

This rate is determined by inflation, local residential real estate market, and other economic factors.

In particular, Rent Stabilization has the massive benefit of reducing the financial risk for developers when it comes to building. Property Management companies can buy units doing their profit analysis on the value the units are worth on the open market.

This means the developer does not have to worry about Rent Control making certain building types unattractive for sale post-construction.

Developers can focus on creating supply to meet the demand of would-be renters instead of worrying about if those projects will be able to turn a profit based on Rent Control regulation.

Regulations must be enforced

Solving Seattle’s rental crisis requires smart decision making and a well-constructed plan.

Additionally, regulations must be well thought out, written to have maximum impact, and pragmatic in their wording and execution.

Poorly planned or toothless regulation will be like pouring gasoline on a raging fire.

The last thing Seattle needs is a situation like London or New York are currently in.

Reports of family members pretending a parent is alive when they actually passed away years ago are not uncommon. Hard to blame them when the rent on their parents place was $270 when the market value is over $2,000!

Now what?

The only way to get this crisis solved is to find solutions that make it profitable for developers and landlords to participate.

As well as, ensuring Seattle residents have safe and affordable rentals to call home.

Solving Seattle’s current rental crisis has no single solution.

Specifically, easing zoning laws, implementing stabilization systems, and smart laws that take the human element and market into account will allow natural change to begin loosening the rental market.

Harmony between supply and demand will help every business in Seattle. When people have more money left in their pockets, businesses have more money in their tills.