Unlike residential units, commercial spaces are commonly leased for 3-5 year terms. With a longer lease term comes a larger responsibility for property management companies to find quality, reputable organizations to fill their vacancies. To find a well qualified tenant, these important screening questions should be addressed either before or during the first scheduled property tour. These questions go beyond a standard background check and screening report.
1. Who is the tenant, and who will guarantee the lease?
2. Can the person guaranteeing the lease verify their financial statements for a minimum of the last three years?
3. What are the lease terms you wish to pursue?
Some may have a long-term commitment to the location, others may only need a space temporarily. This may affect the price per square foot that you are able to negotiate.
4-Is this a startup business?
If yes, request a copy of a formal business plan. Verify investor and lender information.
5. Is there a formal mission statement that summarizes business objectives?
The company should have a verifiable mission statement that reflects an honest and legal business environment.
6. What are the intended operating hours of the business?
7. What is the business ownership and management structure?
There are many ways a business can be structured (e.g., sole proprietorship, partnership, limited partnership, limited liability company, corporation, and nonprofit corporation, cooperative). Will the Owner work on site? How are employees managed in daily operations? 8. What is the company’s operating budget?
9. What is the company history?
Has the company experienced slow and steady growth or a recent spike in business? How was the company originally formed? Where have prior business locations been? Has the company made any layoffs in recent years?
10. What is the Owner/CEO’s background?
Request a formal resume detailing experience.
11. Who is the target market of the tenant’s business?
Look for patterns in behavior within this demographic. Is it a busy retail environment that will increase foot traffic to an otherwise quiet commercial space? Is it a medical practice with an elderly clientele that will require significant suite renovations to accommodate ADA accessibility?
12. Are you prepared to meet the required criteria of a business credit check?
If any of these questions are met with confusion or documents cannot be provided upon request, it’s worth the time to continue your search to secure a solid organization for your commercial space. It’s important to get the best answers for these reports along with a quality background checks, like those from
