Complete Overview To Leasing Industrial Warehouse Property
Before you begin looking for an excellent warehouse space for rent for your small company, you must to get educated about the commercial property leasing process. Being prepared should keep you from making hurried decisions and costly mistakes you will end up regretting in the future. Below are some insider suggestions to help make an informed choice when renting a commercial warehouse space your business
Start the process of searching for commercial space at least 6-12 months before your existing lease expires or before your ideal move-in-date. Locating the right space and negotiating the deal alonewill take 1-2 months depending on the size space and current market conditions. Typically the spaces you like will need some type of tenant improvements that the time required will depend on the scope of work.
Thoroughly research your business’s current and future needs. Consult with the different department heads for input in addition to some key employees.
Get acquainted with the commercial space terms and meanings. Different landlords say and quote things differently. If you’re in doubt about what they mean do not be afraid to ask them to get more info.
If you’re not familiar with the commercial real estate leasing process or the current market conditions then consider engaging the support of a tenant agent. Their services do not cost anything since building owners compensate all of the rental fees. The landlord agent will have an knowledgable listing agent helping them so it would be a great idea for you to have one too.
Physically visit all of the properties that meet your requirements so you can make a short list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord reps a great deal of questions about the ownership, property amenities, required lease duration, how much the landlord is willing to give in tenant construction allowances, etc..
Don’t settle for the first commercial space you think is acceptable for your requirements: continue looking until you have at least two to three alternative choices. These additional options will work to your advantage since you will know what to expect throughout the lease negotiations and you’ll gain more leverage with numerous building owners competing for your tenancy. They also give you something to fall back to whether the negotiations for your first choice fall through.
Send out proposals to your top three to five choices. These aren’t legally binding. You don’t ever want to have a landlord representative’s verbal word. Everything needs to be in writing.
To help you decide what property is most suitable for your company, prepare a spreadsheet to do an apples to apples comparison of each property. A few of the things you need to consider include the dimensions of the space, the asking foundation rental rates, the necessary lease term, and the incremental costs (taxes, insurance, maintenance, etc). You can also take note about the advantages and disadvantages of each property. If you’re budget conscious then you can quickly narrow down the list by simply calculating the monthly base rents for each property then removing those which are way over your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate plus any operating expenses then dividing by 12.
If some of the commercial spaces need tenant improvements then it is important that you figure out what improvements you want on each and get preliminary bids. That way if the landlord is offering a tenant improvement allowance you will learn just how much out of pocket you’ll need to pay over and beyond what the landlord is willing to give.
Carefully examine and compare the terms of each proposal. Consider whether it is logical to return to each landlord to negotiate additional concessions. Be certain you completely understand the total expenses you’re expected to cover. Don’t get emotionally attached to a specific property until the negotiations are over. Emotional attachment might lead to you signing a contract your business can’t live up to.
After negotiations are finalized and you have made your selection now it’s time to have the landlord offer you the first draft of the commercial lease contract.
Now it’s time to reassess the commercial lease contract. It would be advisable for you to hire an attorney to review the lease. For those who have a tenant agent then they can review the lease with you as well. Industrial lease language can be negotiated. If you do not like particular lease items or would like to propose new language now is the time to do so.
Once the end of lease contract negotiations has finished the landlord will provide you a draft of the lease to sign.
There are many more things to consider when leasing commercial property however these tips will help get you started. If you’re a new company leasing commercial space for the first time or an existing company who has only rented one or two spaces then consider getting help from a tenant agent. Their services do not cost you anything and you’ll save a great deal of money and time.
