Before you start searching for a good warehouse space for rent for your small business, you must to get informed about the commercial warehouse leasing process. Being prepared should help prevent you from making rapid decisions and costly mistakes you will end up regretting later on. The following are some insider tips to help make an informed choice when letting a commercial warehouse space your company
Initiate the process of searching commercial space at least 6-12 months before your current lease expires or until your perfect move-in-date. Finding the correct space and negotiating the deal will require 1-2 months depending on the size space and current market conditions. Typically the spaces you like will need some type of improvements which the time needed will depend on the scope of work.
Thoroughly analyze your company’s current and future needs. Consult with the different department heads for input in addition to some key employees.
Get familiar with the commercial property terms and definitions. Different landlords state and quote things otherwise. If you are in doubt about what they mean do not be afraid to ask them to provide more info.
If you are not familiar with the commercial rental process or the current market conditions then consider engaging the help of a tenant rep. Their services do not cost you anything since landlords compensate all the rental fees. The landlord rep will have an knowledgable listing agent representing them so it would be a great idea for you to have one too.
Physically see all the properties that meet your needs so you can make a short list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord reps a great deal of questions regarding who owns the property, 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 space you think is acceptable for your needs: continue looking until you have at least two to 3 other choices. These extra options will work to your benefit because you will know what to expect during the lease negotiations and you will gain more leverage with multiple landlords competing for your tenancy. They also give you something to fall back to whether the negotiations for your first choice go sideways.
Send out proposals to your top three to five choices. These aren’t legally binding. You never need 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 every property. A few of the things you should put into consideration include the dimensions of the distance, the asking foundation rental rates, the required lease term, 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 calculating the monthly base rents for each property then eliminating those which are way over 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. That way if the landlord is offering a tenant improvement 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 analyze and compare the terms of each proposal. Consider whether it makes sense to return to every landlord to negotiate additional concessions. Make certain you fully understand the total expenses you are expected to cover. Don’t get emotionally attached to a certain property until the negotiations are over. Emotional attachment might lead to you signing a contract your business can’t live up to.
After negotiations are finalized and you’ve made your selection now it’s time to have the landlord provide you the first draft of the commercial rental contract.
Now it’s time to reassess the commercial rental contract. It would be wise for you to hire an attorney to review the lease. If you have a tenant agent then they can review the lease with you also. Industrial lease language can be negotiated. If you do not like particular lease items or want to propose new language now is the time to do so.
When the end of rental contract negotiations has ended the building owner will provide you a copy of the lease to review.
There are many more things to consider when renting commercial property however these suggestions will help get you started. If you are a new company renting commercial property for the first time or an current company who has just rented one or two spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you will save a lot of money and time.