Tips For Getting The Very Best Price When Looking For Warehouse Real Estate To Rent
Before you start searching for the perfect warehouse space for your small business, you need to get educated about the commercial warehouse leasing process. Being prepared should help prevent you from making foolish decisions and costly mistakes you will come to regret in the future. The following are some insider tips to help make an informed decision when letting a commercial space your company
Start the process of hunting for commercial space at least 6-12 months before your existing lease terminates or before your ideal move-in-date. Locating the correct space and negotiating the deal will require 1-2 months depending on the size space and current market conditions. In most cases the spaces you like will need some type of changes that the time needed will depend on the scope of work.
completely analyze your company’s present and future needs. Consult with the various department heads for input in addition to some key employees.
Get acquainted with the commercial property terms and meanings. Various landlords state and quote things otherwise. If you are in doubt about what they mean do not be afraid to ask them to supply more info.
If you are not knowledgeable about the commercial real estate leasing process or the present market conditions then consider engaging the help of a tenant representative. Their services do not cost you anything since landlords pay all the rental commissions. The landlord representative will have an experienced listing agent advising them so it would be a good idea for you to have one as well.
Physically see all the properties that meet your needs so you can make a brief list. Keep in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord reps a great deal of questions about the ownership, property amenities, required lease term length, how much the landlord is prepared to give in tenant improvement allowances, etc..
Don’t settle for the first commercial properties you believe is acceptable for your needs: continue searching until you have at least 2 to three other options. These additional options will work to your advantage since you will know what to expect throughout the lease negotiations and you will gain more leverage with multiple landlords competing for your company. They also give you something to fall back to if the discussions to your first choice go sideways.
Send out proposals to your top three to five options. These aren’t legally binding. You don’t ever want to take a landlord agent’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 need to consider include the size of the space, the asking base rental rates, the necessary lease duration, and the incremental expenses (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 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 property need changes then it is important that you determine what improvements you want on each and get construction bids. This way if the landlord is offering a finish out allowance you will learn just how much out of pocket you will need to pay over and beyond what the landlord is prepared to give.
Carefully examine and compare the terms of each proposal. Consider whether it is logical to return to each landlord to negotiate extra concessions. Be certain you completely understand the total expenses you are expected to cover. Don’t get emotionally attached to a specific property until the discussions are over. Emotional attachment might lead to 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 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 can review the lease with you also. Industrial lease language can 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 supply you a copy of the lease to review and sign.
There are many more things to consider when renting commercial real estate 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 one or 2 spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you will save a great deal of time and money.