Before you start looking for a good warehouse space for rent for your small company, you must to get informed about the commercial real estate leasing process. Being prepared should keep you from making expeditious decisions and costly mistakes you will come to regret later on. Below are some insider suggestions to help make an informed decision when leasing a commercial warehouse space your company
Start the process of locating commercial space for lease at least 6-12 months before your existing lease terminates or before your ideal move-in-date. Finding 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 sort of modifications that the time needed will depend on the scope of work.
completely analyze your business’s present and future needs. Consult with the different department heads for input in addition to some key employees.
Get acquainted with allthe commercial real estate terms and meanings. Various landlords say and quote things otherwise. If you are unsure about what they mean don’t be afraid to ask them to supply more information.
If you are not knowledgeable about the commercial rental process or the present market conditions then consider engaging the assistance of a tenant rep. Their services don’t cost anything since building owners compensate all the rental fees. The landlord agent will have an knowledgable listing agent representing them so it would be a great idea for you to have one too.
Personally see all the spaces that meet your needs so you can make a short list. Bear in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord agents a lot of questions about who owns the property, property amenities, required lease term length, how much the landlord is willing to give in tenant improvement allowances, etc..
Do not settle for the first commercial properties you believe is acceptable for your needs: continue searching until you have at least 2 to 3 alternative options. These extra options will work to your advantage because you will know what to expect throughout the lease negotiations and you will gain more leverage with numerous building owners competing for your tenancy. They also give you something to fall back to if the discussions for your first choice go silent.
Send out proposals to your top three to five options. These are not legally binding. You don’t ever need to have a landlord agent’s verbal word. Everything should be in writing.
To help you decide what property is most suitable for your business, prepare a spreadsheet to do an apples to apples comparison of every property. A few of the things you should consider include the size of this space, the asking foundation rental rates, the necessary lease duration, and the incremental costs (taxes, insurance, maintenance, etc). You can also take note about the pros and cons 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 above your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate and any operating expenses then dividing by 12.
If some of the commercial buildings need tenant improvements then it is critical that you determine what changes you want on each and get bids from contractors. 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 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 extra concessions. Be certain 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 result in you signing a contract your business cannot 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 this commercial rental contract.
Now it’s time to review the commercial rental 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 as well. Commercial lease language can be negotiated. If you don’t like particular lease items or would like to propose new language now 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 and sign.
There are several more things to consider when leasing commercial space however these suggestions will help get you started. If you are a new business leasing space for the first time or an existing business who has only rented 1 or 2 spaces then consider getting help from a tenant agent. Their services do not cost you anything and you will save a lot of money and time.