Before you begin looking for the perfect warehouse space for rent for your business,you should to get educated about the commercial property leasing process. Being prepared should help prevent you from making impulsive decisions and costly mistakes thatyou will come to regret in the future. The following are some insider tips to help make an informed choice when letting a commercial warehouse space your business
Start the process of hunting commercial space at least 6-12 months before your existing lease expires or before your perfect 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. In most cases the spaces you like will need some sort of improvements that the time needed will depend on the scope of work.
Thoroughly examine your business’s current and future needs. Consult with the various department heads for input in addition to some key employees.
Get familiar with the commercial space terms and definitions. Different landlords state and quote things differently. If you are in doubt about what they mean do not be afraid to ask them to provide more information.
If you are not knowledgeable about the commercial leasing process or the current market conditions then consider engaging the support of a tenant representative. Their services do not cost anything because building owners pay all of the rental commissions. 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 see all of the properties that meet your needs so thatyou can make a short list. Keep in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord representatives a great deal of questions regarding the ownership,property amenities,required lease term length,how much the landlord is prepared to give in tenant construction allowances,etc..
Do not settle for the first commercial properties you believe is acceptable for your needs: continue searching until you have at least 2 to three alternative options. These extra options will work to your advantage since you will know what to expect during 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 for your first choice go silent.
Send out proposals to your top three to five options. These aren’t legally binding. You don’t ever need to take a landlord agent’s verbal note. Everything needs to 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 each property. Some of the things you should put into consideration include the dimensions of the space,the asking foundation rental rates,the necessary lease term,and the incremental costs (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 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 by the asking base rate plus any operating expenditures then dividing by 12.
If any of the commercial spaces need 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 know how much out of pocket you’ll have to pay above 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 each landlord to negotiate extra concessions. Be certain you completely understand the total expenses you are expected to cover. Do not get emotionally attached to a specific property until the discussions are over. Emotional attachment might lead to you signing a contract thatyour 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 lease contract.
Now it’s time to reassess the commercial lease 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 as well. Industrial lease language can be negotiated. If you do not like particular lease items or want to propose new language today is the time to do so.
Once the end of lease contract negotiations has ended the landlord will supply you a copy of the lease to sign.
There are many more things to think about when leasing commercial space however these ideas will help get you going. If you are a new business leasing commercial space for the first time or an existing business who has only leased 1 or 2 spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you’ll save a great deal of time and money.