Before you start looking for an excellent warehouse space for rent for your business, you need to get informed about the commercial warehouse leasing procedure. Being ready will help prevent you from making rapid decisions and costly mistakes thatyou will probably regret in the future. Below are some insider suggestions to help make an informed choice when letting a commercial warehouse space your company
Initiate the process of searching for commercial space at least 6-12 months before your existing lease expires or before your perfect move-in-date. Locating the right space and negotiating the deal alonewill require 1-2 months depending on the size space and current market conditions. Typically the spaces you like will need some sort of tenant improvements which the time required will depend on the scope of work.
Thoroughly analyze your company’s current and future needs. Consult with the various department heads for input in addition to some key employees.
Get acquainted with allthe commercial real estate terms and meanings. Various landlords state and quote things differently. If you are in doubt about what they mean don’t be afraid to ask them to get more information.
If you are not familiar with the commercial rental process or the current market conditions then consider engaging the help of a tenant agent. Their services don’t cost you anything because landlords pay all of the leasing fees. The landlord rep will have an knowledgable listing agent representing them so it would be a great idea for you to have one as well.
Physically see all of the spaces that meet your needs 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 representatives a lot of questions regarding the ownership, property amenities, required lease duration, how much the landlord is willing to give in tenant construction allowances, etc..
Do not settle for the first commercial space you think is acceptable for your needs: continue searching until you have at least two to 3 other choices. These additional options will work to your benefit because you will know what to expect during the lease negotiations and you’ll gain more leverage with multiple landlords competing for your tenancy. They also give you something to fall back to if the discussions to your first choice go silent.
Send out proposals to your top three to five choices. These are not legally binding. You never need to take a landlord agent’s verbal word. Everything should be in writing.
To help you decide what property is best suited for your company, prepare a spreadsheet to do an apples to apples comparison of each property. A few of the things you need to put into consideration include the size of this space, the asking base rental rates, the necessary lease term, and the incremental costs (taxes, insurance, maintenance, etc). It is also possible to take note about the advantages and disadvantages of each property. If you are 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 from the asking base rate and any operating expenditures then dividing by 12.
If any of the commercial properties need improvements then it’s important that you figure out what improvements you want on each and get preliminary bids. That way if the building owner is offering a tenant improvement allowance you will know just 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 makes sense to return to each landlord to negotiate additional concessions. Be sure you completely understand the total expenses you are expected to cover. Do not get emotionally attached to a specific property until the discussions are over. Emotional attachment might lead to you signing a contract thatyour business can’t live up to.
After discussions are finalized and you have made your selection now it is time to have the landlord offer you the first draft of this commercial lease contract.
Now it is 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 representative then they can review the lease with you also. Commercial lease language can be negotiated. If you don’t like certain lease items or want to propose new language now is the time to do so.
When the end of lease contract negotiations has finished the building owner will supply you a copy of the lease to review.
There are many more things to consider when renting commercial property however these ideas will help get you started. If you are a new company renting space for the first time or an existing company who has just rented 1 or two spaces then consider getting help from a tenant rep. Their services do not cost you anything and you’ll save a great deal of money and time.