Before you start looking for a good warehouse space for rent for your business, you should to get educated about the commercial real estate leasing process. Being prepared should help prevent you from making rapid decisions and costly mistakes thatyou will regret later on. The following are some insider suggestions to help make an informed decision when letting a commercial warehouse space your business
Initiate the process of hunting commercial space at least 6-12 months before your current lease expires or before your ideal move-in-date. Finding the correct space and negotiating the deal alonewill require 1-2 months depending on the size space and current market conditions. In most cases the spaces you like will require some type of improvements which the time required will depend on the scope of work.
completely examine your business’s current and future needs. Consult with the various department heads for input in addition to some key employees.
Get acquainted with the commercial property terms and meanings. Various landlords state and quote things differently. If you’re in doubt about what they mean do not be afraid to ask them to get more information.
If you’re not knowledgeable about the commercial leasing process or the current market conditions then consider engaging the support of a tenant agent. Their services do not cost anything because building owners pay all of the rental commissions. The landlord agent will have an knowledgable listing agent helping them so it would be a good idea for you to have one as well.
Personally tour all of the spaces that meet your requirements so thatyou can make a short list. Bear in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord reps a lot of questions regarding who owns the property, property amenities, required lease term length, how much the landlord is prepared to give in tenant construction allowances, etc..
Do not settle for the first commercial properties you think is suitable for your requirements: continue searching until you have at least 2 to three alternative choices. These additional options will work to your advantage because you will know what to expect during the lease negotiations and you will gain more leverage with multiple building owners competing for your tenancy. They also give you something to fall back to if the negotiations to your first choice go sideways.
Send out proposals to your top three to five choices. These are not legally binding. You don’t ever want to take a landlord representative’s verbal note. Everything needs to be in writing.
To help you decide what property is best suited for your business, prepare a spreadsheet to do an apples to apples comparison of each property. Some of the things you need to put into consideration include the dimensions of this distance, the inquiring base rental rates, the required lease term, and the incremental expenses (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 calculating the monthly base rents for each property then removing those that are way over your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate and any operating expenditures then dividing by 12.
If some of the commercial properties require tenant finish-outs then it is crucial that you figure out what improvements you want on each and get preliminary bids. This way if the landlord is offering a tenant improvement allowance you will learn just how much out of pocket you will have to pay over and beyond what the landlord is prepared to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to go back to each landlord to negotiate additional concessions. Make certain you completely understand the total expenses you’re expected to cover. Do not get emotionally attached to a certain property until the negotiations are over. Emotional attachment might lead to you signing a contract thatyour business cannot live up to.
After negotiations are finalized and you’ve made your selection now it’s time to have the landlord provide you the first draft of this commercial lease contract.
Now it’s time to reassess the commercial lease contract. It would be wise 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 also. Industrial lease language can be negotiated. If you do not like certain lease items or would like to propose new language today is the time to do so.
When the end of lease contract negotiations has finished the landlord will supply you a draft of the lease to review and sign.
There are many more things to think about when leasing commercial property however these suggestions will help get you started. If you’re a new business leasing space for the first time or an current business who has only rented one or 2 spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you will save a great deal of time and money.
