How To Rent Warehouse Space
Before you start looking for a great warehouse space for your business, you should to get educated about the commercial space leasing procedure. Being ready will help prevent you from making foolish decisions and costly mistakes you will probably regret in the future. Below are some insider suggestions to help make an informed decision when letting a commercial warehouse space your company
Start the process of locating commercial space at least 6-12 months before your current lease terminates or until your perfect move-in-date. Finding the perfect 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 sort of modifications which the time needed will depend on the scope of work.
completely research your company’s current and future needs. Consult with the different department heads for input as well as some key employees.
Get familiar with the commercial space terms and meanings. Different landlords say and quote things otherwise. If you are unsure about what they mean don’t be afraid to ask them to get more information.
If you are not familiar with the commercial property leasing 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 representative will have an expert listing agent advising them so it would be a great idea for you to have one also.
Physically tour all of the properties that meet your needs so you can make a brief 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 duration, how much the landlord is willing to give in tenant construction allowances, etc..
Do not settle for the first commercial properties you think is acceptable for your needs: continue searching until you have at least 2 to three alternative choices. These additional options will work to your advantage since you will know what to expect during the lease negotiations and you will gain more leverage with numerous landlords competing for your company. They also give you something to fall back to whether the negotiations for your first choice go silent.
Send out proposals to your top three to five choices. These aren’t legally binding. You don’t ever need to have a landlord agent’s verbal note. Everything needs to 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. Some of the things you need to put into consideration include the dimensions of this distance, the asking foundation rental rates, the necessary lease term, and the incremental expenses (taxes, insurance, maintenance, etc). It is also possible to 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 eliminating those that 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 some of the commercial spaces require tenant improvements then it’s important that you figure out what improvements you want on each and get preliminary bids. That way if the landlord is offering a tenant improvement allowance you will learn how much out of pocket you will have to pay over and beyond what the landlord is willing to give.
Carefully examine and compare the terms of each proposal. Consider whether it makes sense to go back to each landlord to negotiate additional concessions. Be sure you fully understand the total expenses you are expected to cover. Do not get emotionally attached to a specific property until the negotiations are over. Emotional attachment might result in you signing a contract your business can’t 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 this 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 now is the time to do so.
Once the end of rental contract negotiations has finished the building owner will supply you a copy of the lease to review and sign.
There are many more things to consider when leasing commercial space however these suggestions will help get you started. If you are a new company leasing commercial space for the first time or an current company who has only leased one or 2 spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you will save a lot of time and money.