Before you start searching for a great warehouse space for rent for your small company, you must to get informed about the commercial warehouse leasing process. Being prepared will keep you from making foolish decisions and costly mistakes thatyou will probably regret later on. Below are some insider tips to help make an informed decision when letting a commercial space your business
Initiate the process of searching commercial space at least 6-12 months before your existing lease expires or before your perfect move-in-date. Finding the right space and negotiating the deal will take 1-2 months depending on the size space and current market conditions. Typically the spaces you like will need some sort of improvements which the time needed will depend on the scope of work.
completely analyze your business’s present and future needs. Consult with the different department heads for input in addition to some key employees.
Get familiar with allthe commercial real estate 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 supply more info.
If you’re not knowledgeable about the commercial leasing process or the present market conditions then consider engaging the help of a tenant agent. Their services do not cost you anything because landlords compensate all of the rental commissions. The landlord rep will have an experienced listing agent advising them so it would be a good idea for you to have one too.
Physically tour all of the properties that meet your requirements so thatyou 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 about the ownership, property amenities, required lease duration, how much the landlord is willing to give in tenant construction 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 three other 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 landlords competing for your tenancy. They also give you something to fall back to whether the discussions to your first choice fall through.
Send out proposals to your top three to five options. These aren’t legally binding. You don’t ever 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 size of the distance, the asking base rental rates, the necessary lease term, and the incremental expenses (taxes, insurance, maintenance, etc). It is also possible to take note about the pros and cons of each property. If you’re 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 above your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate plus any operating expenses then dividing by 12.
If any of the commercial spaces need tenant improvements then it is 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 just how much out of pocket you’ll have 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 return to each landlord to negotiate additional concessions. Be certain 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’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. For those who have a tenant agent then they can review the lease with you also. Commercial lease language can be negotiated. If you do not like certain lease items or want to propose new language today is the time to do so.
Once the end of rental contract negotiations has finished the building owner will give you a copy of the lease to sign.
There are many more things to think about when leasing commercial space however these suggestions will help get you started. If you’re a new company leasing commercial space for the first time or an existing company who has just rented one or 2 spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you’ll save a great deal of money and time.