Tips On How To Lease Industrial Warehouse Space
Before you start searching for a great warehouse space for your startup company,you must to get informed about the commercial property leasing procedure. Being ready should keep you from making expeditious decisions and costly mistakes thatyou will come to regret later on. Below are some insider suggestions to help make an informed choice when renting a commercial property your business
Initiate the process of searching commercial space at least 6-12 months before your existing lease expires or before your perfect move-in-date. Finding the right space and negotiating the deal will take 1-2 months depending upon the size space and current market conditions. In most cases the spaces you like will require some sort of improvements that the time required will depend on the scope of work.
Thoroughly research your company’s present and future needs. Consult with the various department heads for input in addition to some key employees.
Get familiar with allthe commercial space terms and definitions. Different landlords say and quote things differently. If you’re in doubt about what they mean don’t be afraid to ask them to provide more information.
If you’re not familiar with the commercial leasing process or the present market conditions then consider engaging the support of a tenant agent. Their services don’t cost you anything since building owners pay all the rental fees. The landlord representative will have an experienced listing agent helping them so it would be a good idea for you to have one as well.
Physically tour all the spaces that meet your requirements so thatyou can make a brief list. Keep in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord agents a lot of questions about the ownership,property amenities,required lease term length,how much the landlord is willing to give in tenant construction allowances,etc..
Don’t settle for the first commercial space you believe is suitable for your requirements: continue looking until you have at least two to 3 alternative choices. These additional options will work to your benefit because you will know what to expect throughout the lease negotiations and you’ll gain more leverage with numerous building owners competing for your company. They also give you something to fall back to whether the negotiations to your first choice go silent.
Send out proposals to your top three to five choices. These aren’t legally binding. You never want to take a landlord representative’s verbal note. Everything should 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. Some of the things you should put into consideration include the dimensions of the distance,the inquiring base rental rates,the necessary lease duration,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 eliminating those which are way over your budget. The monthly base rent is calculated by multiplying the commercial space square feet by the asking base rate plus any operating expenditures then dividing by 12.
If any of the commercial property require tenant improvements then it’s important that you determine what improvements you want on each and get preliminary bids. This way if the building owner is offering a construction allowance you will know how much out of pocket you’ll have to pay over and beyond what the building owner is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to return to each landlord to negotiate extra concessions. Be sure you fully 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 thatyour business cannot live up to.
After negotiations are finalized and you have made your selection now it is time to have the landlord offer you the first draft of the commercial rental contract.
Now it is time to review the commercial rental contract. It would be advisable for you to hire an attorney to review the lease. If you have a tenant agent then they could review the lease with you as well. Industrial lease language could be negotiated. If you don’t like particular lease items or would like to propose new language today is the time to do so.
Once the end of rental contract negotiations has finished the building owner will give you a draft of the lease to review.
There are several more things to think about when renting commercial space however these suggestions will help get you started. If you’re a new company renting commercial space for the first time or an existing company who has just rented one or two spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you’ll save a great deal of time and money.