Before you start looking for an excellent warehouse space for rent for your startup, you will need to get educated about the commercial warehouse leasing process. Being prepared will help prevent you from making impulsive decisions and costly mistakes thatyou will end up regretting later on. Below are some insider tips to help make an informed choice when letting a commercial warehouse space your company
Start the process of hunting for commercial space for lease at least 6-12 months before your existing lease expires or until your ideal move-in-date. Finding the correct space and negotiating the deal alonewill take 1-2 months depending upon the size area and current market conditions. Typically the spaces you like will need some type of tenant improvements which the time needed will depend on the scope of work.
completely analyze your business’s present and future needs. Consult with the various department heads for input in addition to some key employees.
Get familiar with the commercial property terms and meanings. Different landlords state and quote things differently. If you’re unsure about what they mean don’t be afraid to ask them to provide more information.
If you’re not familiar with the commercial real estate leasing process or the present market conditions then consider engaging the help of a tenant representative. Their services don’t cost anything because building owners pay all of the rental fees. The landlord representative will have an knowledgable listing agent helping them so it would be a great idea for you to have one too.
Personally tour all of the properties that meet your needs so thatyou can make a brief list. Keep in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord agents a lot of questions about the ownership, property amenities, required lease duration, how much the landlord is prepared to give in tenant improvement allowances, etc..
Do not settle for the first commercial properties you think is suitable for your needs: continue looking until you have at least 2 to three other choices. These extra options will work to your benefit since you will know what to expect throughout the lease negotiations and you’ll gain more leverage with numerous building owners competing for your company. They also give you something to fall back to if the discussions to your first choice fall through.
Send out proposals to your top three to five choices. These aren’t legally binding. You don’t ever want to take a landlord agent’s verbal word. Everything should be in writing.
To help you decide what property is best suited 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 distance, the asking base rental rates, the necessary lease term, and the incremental expenses (taxes, insurance, maintenance, etc). You can also take note about the pros and cons 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 removing 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 property need reconfiguring then it’s important that you determine what changes you want on each and get prelim construction bids. This way if the landlord is offering a finish out allowance you will know just how much out of pocket you’ll need to pay above and beyond what the landlord is prepared to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to return to every landlord to negotiate extra concessions. Be sure you completely understand the total expenses you’re 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 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 this commercial lease contract.
Now it’s time to review the commercial lease contract. It would be advisable for you to hire an attorney to review the lease. If you have a tenant representative then they can review the lease with you also. Industrial lease language can be negotiated. If you don’t like particular lease items or want to propose new language today is the time to do so.
When the end of lease contract negotiations has ended the landlord will supply you a draft of the lease to review.
There are many more things to think about when renting commercial property however these tips will help get you going. If you’re a new business renting commercial space for the first time or an existing business who has only rented 1 or 2 spaces then consider getting help from a tenant representative. Their services do not cost you anything and you’ll save a lot of time and money.