Ultimate Overview To Renting Warehouse Properties
Before you start looking for a good warehouse space for rent for your startup, you need to get informed about the commercial real estate leasing process. Being ready will prevent you from making hasty decisions and costly mistakes you will regret in the future. The following are some insider suggestions to help make an informed choice when letting a commercial space your company
Initiate the process of searching for commercial space at least 6-12 months before your existing lease terminates or until your perfect move-in-date. Locating the perfect space and negotiating the deal alonewill require 1-2 months depending on the size space and current market conditions. In most cases the spaces you like will need some sort of modifications that the time required will depend on the scope of work.
Thoroughly analyze your business’s present and future needs. Consult with the various department heads for input in addition to some key employees.
Get acquainted with allthe commercial property terms and meanings. Various landlords say and quote things differently. If you’re in doubt about what they mean do not be afraid to ask them to get more info.
If you’re not knowledgeable about the commercial leasing process or the present market conditions then consider engaging the assistance of a tenant representative. Their services do not cost you anything because building owners pay all of the leasing fees. The landlord rep will have an expert listing agent representing them so it would be a great idea for you to have one also.
Personally see all of the spaces that meet your requirements 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 representatives a lot of questions about the ownership, property amenities, required lease duration, how much the landlord is willing to give in tenant improvement allowances, etc..
Do not settle for the first commercial properties you believe is suitable for your requirements: continue looking until you have at least 2 to 3 alternative options. These extra options will work to your benefit because you will know what to expect throughout the lease negotiations and you’ll gain more leverage with multiple building owners competing for your tenancy. They also give you something to fall back to whether the discussions to your first choice go silent.
Send out proposals to your top three to five options. These are not legally binding. You never want to have a landlord agent’s verbal word. 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 should put into consideration include the dimensions of the space, the inquiring base rental rates, the necessary lease term, and the incremental expenses (taxes, insurance, maintenance, etc). It is also possible to take note about the advantages and disadvantages of each property. If you’re budget conscious then you can quickly narrow down the list by calculating the monthly base rents for each property then eliminating those which are way above your budget. The monthly base rent is calculated by multiplying the commercial space square feet from the asking base rate and any operating expenses then dividing by 12.
If some of the commercial properties need improvements then it’s important that you determine what improvements you want on each and get construction bids. This way if the landlord is offering a construction allowance you will know just how much out of pocket you’ll need to pay above and beyond what the landlord is willing to give.
Carefully examine and compare the terms of each proposal. Consider whether it is logical to go back to each landlord to negotiate additional concessions. Make certain you fully understand the total expenses you’re expected to cover. Do not get emotionally attached to a certain 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’ve 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 advisable for you to hire an attorney to review the lease. For those who have a tenant representative then they could review the lease with you also. Industrial lease language could be negotiated. If you do not like certain lease items or would like to propose new language today is the time to do so.
When the end of rental contract negotiations has ended the landlord will give you a draft of the lease to sign.
There are many more things to consider when renting commercial space however these tips will help get you started. If you’re a new company renting commercial property for the first time or an existing company who has just rented 1 or 2 spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you’ll save a lot of time and money.
