Before you begin searching for an excellent warehouse space for rent for your business, you should to get educated about the commercial real estate leasing process. Being prepared will prevent you from making hasty decisions and costly mistakes thatyou will probably regret later on. Below are some insider tips to help make an informed decision when letting a commercial warehouse space your business
Initiate the process of hunting for commercial space for lease 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 take 1-2 months depending on the size area and current market conditions. In most cases the spaces you like will require some type of tenant improvements which the time needed will depend on the scope of work.
Thoroughly examine your business’s present and future needs. Consult with the various department heads for input as well as some key employees.
Get familiar with allthe commercial space terms and definitions. Various landlords state and quote things otherwise. If you are in doubt about what they mean do not be afraid to ask them to get more information.
If you are not familiar with the commercial property leasing process or the present market conditions then consider engaging the assistance of a tenant agent. Their services do not cost anything since building owners compensate all 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 visit all the properties that meet your needs so thatyou can make a short list. Keep in mind that the layouts 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 duration, how much the landlord is willing to give in tenant improvement allowances, etc..
Don’t settle for the first commercial space you think is suitable for your needs: continue looking until you have at least two to three alternative options. These additional options will work to your advantage since you will know what to expect during 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 discussions for your first choice go sideways.
Send out proposals to your top three to five options. These aren’t legally binding. You don’t ever need to take 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 every property. A few of the things you need to consider include the dimensions of the distance, the inquiring 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 are budget conscious then you can quickly narrow down the list by simply calculating the monthly base rents for each property then removing those that are way above your budget. The monthly base rent is calculated by multiplying the commercial space square feet by the asking base rate plus any operating expenses then dividing by 12.
If some of the commercial spaces require tenant improvements then it is important that you determine what improvements you want on each and get preliminary bids. This way if the landlord is offering a tenant improvement allowance you will learn how much out of pocket you’ll have to pay above and beyond what the landlord is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to go back to every landlord to negotiate additional concessions. Be certain you fully understand the total expenses you are expected to cover. Don’t get emotionally attached to a certain 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’s time to have the landlord offer you the first draft of the commercial rental contract.
Now it’s time to review the commercial rental contract. It would be wise for you to hire an attorney to review the lease. For those who have a tenant agent then they could review the lease with you as well. Industrial lease language could be negotiated. If you do not like certain lease items or would like to propose new language now is the time to do so.
When the end of rental contract negotiations has finished the landlord will give you a draft of the lease to review and sign.
There are many more things to consider when renting commercial property however these suggestions will help get you going. If you are a new company renting commercial property for the first time or an current company who has just leased 1 or two spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you’ll save a lot of money and time.