No matter how big or small your company is today, there’s probably an ideal landlord that you’ve got in mind as you look for an office for rent or other commercial real estate to occupy.
There are basically five main types of landlords you’ll find in commercial real estate, having a better understanding of who they are and how they work can help you choose a landlord who will be a great match for your business.
Here is just a little bit about each type of landlord:
- Individual owners. Also known as mom and pops, individual commercial real estate owners don’t own a ton of real estate, so they’ll often act as their own leasing agents to save money. They can be really flexible on terms, depending on the tenant, and are very straightforward to deal with. Their main focus is on finding someone who will maintain their space like it was their own, so don’t hesitate to explain your business in great detail and make it a very personal transaction.
- Family investors. Often starting out as individual investors, family investors have significant real estate investments and have held units for decades, or longer. Their offices are made up of several people who perform various tasks, including dedicated leasing agents to maintain their many properties. These folks will be looking for tenants who will stick around a while over tenants who would pay a premium, and will often be accommodating to the needs of SMBs who will sign long-term leases.
- Management companies. Like family investors, management companies have extensive portfolios, giving them a number of units to show at any time, but they act on the behalf of property owners. Because they don’t own the properties themselves, management companies can help you find a property that will be a good fit, but they’re rarely as flexible when it comes to terms or pricing. Expect to be asked to sign a longer commercial lease.
- Real estate developers. Although these guys are often limited to large metro areas, you can stumble across real estate developers in smaller cities, too. They’ve often built mixed-use properties and are looking for premium tenants who want new and high budget spaces. Deals with developers can take a long time to close because of construction schedules, but because they’re building the units they’ll often add custom features for your business with the right lease in place.
- Institutional investors. Many SMBs will never come across real estate investment trusts and other similar funds that are managed for portfolios, but if your business is really growing you might. These guys are not your typical landlords, so make sure all your paperwork is done properly and secure your own realtor to review your lease on your behalf. The driving force here is occupancy rates and cash flow, unless you’re an anchor tenant you will very likely just be a number.
When hunting for the right piece of commercial real estate to rent, the type of landlord that you rent from can be as important a factor as where the place is located and what the zoning is like. After all, if you can’t forge the sort of relationship you need with your property’s owner, you’ll likely want to keep looking for a permanent location for your business in the long run.