It doesn’t matter whether you locate in a small strip mall, or a multi-storied shopping complex, you want to try to do everything you can to avoid competition with a rival business owner. Competition cuts into your profits and can even lead to an unwanted and unprofitable price war.

Use clauses are one of the areas of the lease that can be negotiable and if not negotiated or worded correctly can lead to ‘bad blood’ occurring between a landlord and tenant. It is an area that can also lead to expensive litigation

One of the key elements of any business lease involves the “Use” clause. Use clauses come in 3 types which include:

• ‘General’ Use Clause – This is a general term where a landlord will want to spell out the nature of the products or services you are offering. Generally, most landlords will attempt to narrow your business capacity which can be limiting for you. Alternatively, most tenants want as broad a range as possible to allow for greater flexibility in the goods or services they are selling to maximize profits.

• ‘Exclusive’ Use Clause– An exclusive use clause is the one that should be of paramount importance to you as a commercial tenant. This type of clause explicitly allows you to clearly spell out that you and only your business will be able to engage in a particular business enterprise. This type of clause has to be spelled out very succinctly and cannot be open to interpretation to achieve this objective.

• ‘Restrictive’ Use Clause – This is another key clause found in many commercial lease contracts. In a nutshell, this performs the complete opposite function of an ‘exclusive’ use in that it spells out what products, merchandise or services that you are prohibited from selling or offering.

As these are clauses that are clearly vital to the ongoing success of your business, it can be to your advantage to seek legal advice if you aren’t clear on the language used or the implications of the lease for your particular business.

You also always want to know or ask the landlord how disputes involving any alleged breaches of any of these “use” clauses are handled if a complaint is levied against you, or for a complaint you make against a competitor.

There are really only 2 basic ways in which a breach of any of these clauses can occur. The first would be if someone starts selling some merchandise which they are not authorized to do so under the terms of their lease agreement.

The second breach can occur when a landlord inadvertently allows another tenant to sell merchandise in clear violation of your lease agreement.

You are best advised to not only seek legal counsel when reviewing a lease, but also in referring the matter to your counsel should your complaints not be addressed. When you are considering moving into a new commercial space, it may well be worth your while to talk to other tenants and see if this is a problem which has occurred with any kind of frequency before you proceed further.

Photo by Aleksej Leonov

• SPACE AVAILABLE: 6,000 SF up to 7,500 SF
• NET RENT: Market
• OPERATING COSTS: $13.10 PSF
• SIGNAGE: Fascia and Pylon
• AVAILABILITY: Immediatley
• ELECTRICAL: 400 amp
• HVAC: 1 Ton: 400 SF / 15 Tonnes
• CEILING HEIGHT: 13’

Property Highlights

• Close proximity to South Centre shopping mall
• Quick access to major transportation arteries including Macleod
  Trail, Anderson Rd. and Southland Dr.
• Willow Park Village’s tenant mix includes Starbucks, TD Canada
  Trust, Caesar’s Restaurant and many more

Area Demographics

• Population: 59,330 (2012)
• Average household income: $114,264 (2012)

Traffic Flow

• Macleod Trail: 53000 VPD
• Anderson Road: 42000 VPD
• Bonaventure Drive: 19000 VPD

Space Available

Basement: 3,807 SF
Main floor: 3,839 SF
Second floor: 1,413 SF

Rent

Basement: $10.00
Main floor: $38.00
Second floor: $30.00

Available

Oct 2013

Zoning

C-COR1

Est. Op. Costs

$12.00 PSF

Scenario #2 – Redevelopment

Space Available

Basement: 4,293 SF
Main floor: 4,293 SF
Second floor: 1,497 SF
Roof: 2,500 SF

Rent

Basement: $15.00 PSF
Main floor: $45.00 PSF
Second floor: $30.00 PSF
Roof: $15.00 PSF

Available

Negotiable

Zoning

C-COR1

Est. Op. Costs

$12.00 PSF

Surrounding Area

There are many decorators and designers out in the marketplace, but when it comes to designing the interior of a commercial space, they are not all the same.

Choosing a Registered Interior Designer

A Registered Interior Designer (RID) is quite different from a decorator or interior designer. A decorator or interior designers perform functions that are quite different than an interior designer who is registered.

Commercial projects require a specialized knowledge skill set which sets an RID specialist apart from other designers. They are required to take education courses and have to write and pass the National Council for Interior Design Qualification (NCIDQ). This is a North American association that ensures that candidates have both the education and experience before they will even be considered to qualify to write the exam and become registered.

Once the exam is successfully completed the successful candidates must be accepted by the provincial association before they can practice in a professional capacity. Most provincial associations require that members take regular continuing education courses so they are up to speed on current trends and technological advances in their field.

Now you can appreciate why you should use the services of a Registered Interior Designer as the route you are best advised to use when it comes to designing your commercial office space.

Benefits of an RID Specialist

The services can be of benefit to you in a number of ways which can actually help you increase your bottom line because these professionals can achieve the following:

• Strengthen the productivity in the workplace
• Improve the work conditions of employees
• Augment the rate of client visitation
• Encourage spending by clients or customers

By using an RID specialist you can also expect that your project is more likely to be completed in a timely manner and within your budget.

Researching Your Registered Interior Designer

You can begin your search for a qualified RID specialist through the National Council for Interior Design Qualification (NCIDQ) and confirm their accreditation by getting in touch with the Interior Designers of Alberta association also known as the Registered Interior Designers Institute of Alberta.

Selecting a Calgary RID Specialist

You will want to review their website so you can get a preliminary peek at their portfolio and references. The prospective candidate you interview should put a proposal together that reflects the following:

• The brand of your company and the products you promote
• The timeliness of how the project is to be completed
• That they perform the design pre-requisites within the budget you have established.
• Plans for future expansion
• That they adhere to your company values and corporate philosophy
• Their ability to use and incorporate an eco-friendly design
• How they will use the services of other consultants such engineers who are responsible for structural, mechanical or electrical aspects of the design composition. This should also include any architects involved, all contractors and lighting designers.

Finals Steps in Selecting an RID Specialist

Your final steps in selecting the registered interior design specialist are to obtain their proposal which will include a ‘Scope of Work’ or a RFP (Request for Proposal) submission to ensure they understand the scope of work required and the terms of the agreement.

Once the project is awarded you can feel more confident that your commercial office space will achieve your objectives to create a happy and productive work environment that meets all you expectations.
Photo by loozrboy

Planning and due diligence are the cornerstones while arranging your financing beforehand will establish a strong foundation when buying a commercial property.

Here are some basic steps to get you started in the right direction to buy Calgary commercial real estate.

Step 1 Determine What You Want

Your first step is to clearly establish what you want and what you need. This could be as simple as a specific size for office space, or more complex such as whether you want tenants or even a specific type of tenant.

You will want to consider the size of the building and the exterior lot, the number of units and even the condition of the commercial structure.

Basically, you need to draw up your ideal ‘wish list’ which includes what is essential and also what you would ideally like to include.

Step 2. Study the Local Market Beforehand

This not only means the local real estate market but you also need to be aware of the zoning regulations, the tax requirements and applicable environmental requirements.

One of your first steps should be contact the local municipality at Calgary city hall and then to review any applicable provincial regulations.

This relates to your intention or what you wish to achieve with your purchase. If you are buying a property for your own business, you will have different needs and will have to employ a different strategy than someone who is purchasing an existing property solely to generate an income from tenants for example.

You may also need to get some demographic information to understand the availability of skilled labour for your enterprise.

Step 3 Arrange Financing Beforehand

Even before you begin to look at properties it is best to have your financing strategy in place beforehand. Consider all the available financing options you have to clearly understand what you will have on hand. This includes private financing, or using a commercial lender or bank, and even some of your own assets.

Ideally, your aim should be to access other people’s money and not your own.

If you are borrowing, you should find a lender that specializes in commercial property. You will need to clearly understand the lending criteria they require and prepare the information beforehand. The goal is to get pre-approved before viewing potential properties.

Step 4 Screen Properties

Using the criteria that you have already established, your next step is to begin the screening process. The easiest way to find the properties that are of interest to you is to select an established commercial real estate agent so they can begin your search. This will allow you filter through the available properties more rapidly.

As you locate one or more properties, you will have to perform some due diligence and thoroughly research the property.

Step 5. Make the Offer

Once you have a commercial property that you wish to purchase, then all you have to do is develop your offer and submit it. This also requires some research and some likely negotiation.

Planning, research, financing, due diligence and using the right professionals will make your transaction run more smoothly and effortlessly.
Photo by Teemu08

It doesn’t matter if you’re buying a commercial property to construct a building, buy an existing one or purchasing the property for investment purposes.

One of the most important things to remember is that it is never too early to start the planning process. If you’re going to buy commercial real estate you should start putting your team together right now.

This includes your commercial realtor, lawyers, builder and designers, financial and tax advisors, commercial insurance agent, environmental inspectors and any others applicable experts and specialists to assist you in your commercial purchase.

Here are some of the most common commercial real estate questions that many entrepreneurs should be asking.

1. What Type of Building Is Required?

You have to think not only in terms of what space you need, but also consider a long term plan with growth in mind. You have to do some serious demographic research to understand if this location will provide you with traffic or meet other needs such as transportation or warehousing.

2. What Are Your ‘Must-Haves’?

To find a commercial property that meets your absolute essential needs, it is advisable to draw up what you absolutely need to fulfill your business expectations. This could include size, transportation hub, parking, machinery, environmental issues, zoning and a whole host of other issues relevant to your particular business model. The list is incredibly extensive and needs to be realistic.

3. What Equipment Will I Need?

You need to perfectly clear on what technological or machinery requirements you will need. It can range from HVAC, heating, electrical, computer servers and a whole host of other specialized features that will run your business.

4. Will I Need Title Insurance?

Purchasing title insurance should be included in any purchase of commercial real estate as it can protect you in a variety of nasty legal issues that can crop out of nowhere. You should always thoroughly investigate the history of a commercial property in any event.

5. What Will My Lawyers Need?

Since all commercial investment transactions have different needs, the easiest approach is to touch base with your commercial real estate lawyer and have the lawyer advise you on what you need to proceed with a purchase so your paperwork is assembled beforehand. If you are in partnership you will also want to clarify issues relating to the property title.

6. Should I Hire a Building Inspector?

Yes, you should always have an existing commercial property properly inspected by a reputable building inspector. Additionally, you will have to perform some form of environmental assessment in any event as well. If you are financing the property, just about every lender will require that your commercial property be properly inspected and an environmental inspection performed.

These 6 simple questions just scratch the surface of what you really need to ask to start the process. Issues such as financing, hiring architects and contractors, property taxes, zoning issues, appraisers and many other specialists will get you started in organizing your questions to ask.

Preparation and a methodical and systematic approach will make your commercial real estate transaction run smoothly and successfully.
Photo By Wallyg

For any purchaser of Calgary real estate, these issues can come back to haunt if you don’t know what existed previously on the land or property you are about to buy for your commercial enterprise.

Here are some things you should know before you invest heavily into your enterprise.

What Constitutes a Contaminated Site?

A contaminated site means any land which contains sufficient pollutants that has the potential to cause a hazard to either people or the environment. This usually occurs in commercially used land areas where previous practices may been unsafe and where various types of hazardous materials were previously employed, stored or manufactured.

In almost 60% of instances involving residual pollutants the biggest culprit came from those commercial sites which used PHC (Petroleum Hydrocarbon). Other pollutants often occur from animal waste, nitrogen and potassium phosphate. Additionally, other polluting culprits involved included materials such as metals including lead, mercury, zinc, iron, sulphur, radon gas lead and cadmium along with organic toxins such as pesticides and PCBs.

Problems Caused By Environmental Pollutants

A variety of both health and environmental problems can stem from these previously used pollutants as they can find their way into both the groundwater or soil, and can even be dangerous in that they can cause a fire or something more drastic such as an explosion. They can also cause smells which are noxious and be harmful to human health.

How to Research Your Calgary Commercial Property

The best approach so that you don’t get caught with a big clean up bill which could end making your commercial enterprise untenable is to perform an environment assessment of the property.

You also want to especially watch out for any previous industrial activity which may have involved the following commercial applications:

• Any process involving the extraction or processing of petroleum or oil
• Any form of chemical manufacturing
• Animal and food processing
• Metal and mineral processing
• Facilities used for transportation
• Waste treatment
• Pulp and paper processing
• Asphalt or cement processing and manufacturing

In most instances, the lender will require the assessment but it should be done in any eventuality before you buy a commercial property.

You should also familaise yourself with the appropriate provincial regulations for Alberta to ascertain who has to accept responsibility for the clean-up of any pollutants and whether any programs exist that would help you rehabilitate the land.

If you discover that there are environmental issues, then you always want to know the following:

1. Who caused the contamination in the first place?
2. What is the potential for any liability in the future?
3. How will this impact the real estate value in the future?
4. Is the clean-up cost worthwhile?

Buying commercial property in Calgary should be done with care and by taking the right steps to ensure you don’t get stuck with a huge clean-up project which could end up damaging your bottom line or even to make your investment untenable.
Photo By karlrobbin

Space Available:

Basement 850 SF
Main Floor 2705 SF
Second Floor 2631 SF

Year Built: 2002

Opt. Costs 2013: $12.01 PSF

Parking: 3 Surface stalls

Features

• Award-winning character building located along Stephen Avenue Mall
• Property is situated on the south side of Stephen Avenue, between 1st Street and Centre Street SW, the primary area for pedestrian traffic in the City’s Central Core and only one block from the LRT line
• Building has an excellent location with proximity to favourable amenities such as: Olympic Plaza, Telus Convenion Centre, the Core Mall, Bay, Calgary Tower and Hyatt Hotel

SPACE AVAILABLE: 2,759 SF
SIGNAGE: Fascia and Pylon
PRICE: $500 psf
CONDO FEES: $1220.50/ month
PARKING: 10 Stalls

Features

• Located right along the 4th Street retail corridor
• Great signage
• 75 feet of frontage
• Redevelopment

Neighborhood Retail Mix

• Vaulted ceilings
• New construction
• 28,000 vehicles pass by per day
• Serving Beltline communities
• Continuous new development from high rise developers constantly increasing population and traffic

PROPERTY INFORMATION

SPACE AVAILABLE:

• 102: 1,356 SF
• Mezzanine in 102: 347 SF

ASKING LEASE RATE:
$30.00 Net

ASKING SALE PRICE:
102: $775,000 + GST

POSSESSION:
Immediate for fixturing

PARKING:
Titled parking

LEASE TERM:
5-10 Years