Commercial Real Estate- Tips? Experiences?

It’s very hard these days to lease a commercial space for a studio and make it profitable. You almost have to own the building for it to have a chance. The cost of the buildout makes it a dicey proposition when the landlord can raise rent at the end of the lease term, or when a new owner can jack up the price.

That being said, if you go that route get someone to negotiate the lease for you. There really are no “standard” commercial leases, at least not like residential leases. There may be some common lease terms you’ll see like Triple Net Leases, but everything is negotiated.

One thing you can do is negotiate a lease rate, with an option to renew at the same rate when the lease expires. For example, you pay $1k’per month over a three year lease period with the option to renew for another three years at the same rate. That at least guarantees your lease expenses over the first several years of your business (when your start up costs are the highest).

If you're investing significant capital into the fitting out a studio space in someone else's building then I'd personally look for a guaranteed long term lease (in the form of options - checked over by a solicitor) and to get a landlord who understands your business and to a degree is "on your side" and understands what you're trying to achieve on your own personal financial risks.

They are out there, not all landlords are cut throat - but the last thing you want is to invest substantial sums and then an unscrupulous landlord see the opportunity to hike the rent in the belief you'll suck it up - I've seen this happen to studio's I've worked in.

Better to buy a property  - especially longer term  - but obviously this is the far more expensive route.

Here in the UK - this company deals in ready to hire/buy commercial and residential studio spaces.

It will give you some ideas.
mjq.co.uk/properties/

They even have time share studio spaces now - as the market is so difficult to make a regular profit in - especially in big cities.
You are defiantly going to need a unique selling point for your studio - it's not a thriving scene like it once was!

I wish you good luck.

I was in my space for about 4.5 years. After the original lease ran out, we were month to month. Installed the 5088 in September. Jan 1, my landlord told me I needed to be out by March 1 because he was expanding his business in the same building and needed more space.

Now there is another “studio” there for what I assume is much higher rent. Landlord didn’t even give me the option of upping the rent.

The upside was that my gf was diagnosed with cancer that April, so I was available to help take care of her while that was going on. It’s been a long 2 years.

Anyway, I would not build out anything that I don’t own. Trying to be a full time commercial studio at this point is a very difficult prop. Look at the rates of studios in your area. Not sure how busy your schedule looks with bands etc. My last year in the space I did 162 bookings in addition to my full time job. Working my balls off to make it work. And after all expenses of running the place, and stuff, my hourly rate was shit. Now I’m self recording in my living room, recording the projects I want to work on instead of whoever had a fist full of money, and still putting out quality product.

The idea of having a live room with 2 control rooms is boss though. I’ve had the same thoughts. Much more flexibility and usability of the space that way. If you could even squeeze a 3rd control room, could be good. We had many sessions where we just needed the control room and iso booth and that live room would have been free for someone else if we had another control room.

That’s absolutely the way to go.

First with any partnership you need an ironclad partnership agreement that covers as many possible outcomes as possible.

commercial real estate is tricky, lots of owners have no problem with a space sitting empty rather than at least covering expenses.  Don’t be tricked by a really nice short term offer. The trick many pull is getting you in and invested in the space, then jacking up the rent.

Had a similar situation as jcoutu1. Owned a great studio in downtown SLC that I ran with a business partner. Full build out and acoustics. Not cheap. The building was sold and we were notified we had 2 months to vacate. It can be extremely painful when this happens.

Bottom line: own, don't lease.