Before you begin looking for an excellent warehouse space for rent for your small business, you will need to get informed about the commercial warehouse leasing procedure. Being prepared should prevent you from making foolish decisions and costly mistakes thatyou will end up regretting in the future. The following 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 current lease expires or until your ideal move-in-date. Finding the right space and negotiating the deal alonewill take 1-2 months depending on the size area and current market conditions. In most cases the spaces you like will require some sort of improvements which the time needed will depend on the scope of work.
completely analyze your company’s present and future needs. Consult with the different department heads for input as well as some key employees.
Get familiar with the commercial property terms and definitions. Different landlords say and quote things differently. If you are unsure about what they mean don’t be afraid to ask them to get more info.
If you are not knowledgeable about the commercial leasing process or the present market conditions then consider engaging the support of a tenant representative. Their services don’t cost you anything since landlords compensate all the rental commissions. The landlord agent will have an professional listing agent representing them so it would be a great idea for you to have one too.
Physically see all the spaces 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 representatives a lot of questions about who owns the property, property amenities, required lease term length, how much the landlord is willing to give in tenant construction allowances, etc..
Do not settle for the first commercial space you believe is suitable for your needs: continue looking until you have at least 2 to three alternative options. These additional options will work to your benefit since you will know what to expect during the lease negotiations and you’ll gain more leverage with numerous landlords competing for your business. They also give you something to fall back to whether the negotiations to your first choice fall through.
Send out proposals to your top three to five options. These are not legally binding. You never want to take a landlord representative’s verbal word. Everything needs to be in writing.
To help you decide what property is most suitable for your business, prepare a spreadsheet to do an apples to apples comparison of each property. Some of the things you should consider include the dimensions of this distance, the asking foundation rental rates, the necessary lease duration, and the incremental expenses (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 simply calculating the monthly base rents for each property then removing those that are way over your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate plus any operating expenses then dividing by 12.
If some of the commercial spaces require tenant improvements then it is important that you determine what improvements you want on each and get preliminary bids. This way if the landlord is offering a tenant improvement allowance you will learn how much out of pocket you’ll have to pay over 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 extra concessions. Be sure you fully understand the total expenses you are expected to cover. Do not get emotionally attached to a certain property until the negotiations are over. Emotional attachment might result in you signing a contract thatyour business cannot 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 this commercial lease contract.
Now it’s time to review the commercial lease contract. It would be wise 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 as well. Industrial lease language could be negotiated. If you don’t like particular lease items or want to propose new language now is the time to do so.
Once the end of lease contract negotiations has finished the landlord will supply you a copy of the lease to review and sign.
There are many more things to consider when renting commercial property however these suggestions will help get you started. If you are a new business renting commercial space for the first time or an current business who has only leased 1 or 2 spaces then consider getting help from a tenant agent. Their services do not cost you anything and you’ll save a lot of time and money.