Before you begin looking for a great warehouse space for rent for your startup company, you should to get informed about the commercial property leasing procedure. Being prepared will prevent you from making impulsive decisions and costly mistakes thatyou will come to regret later on. Below are some insider suggestions to help make an informed decision when leasing a commercial warehouse space your business
Initiate the process of searching commercial space at least 6-12 months before your existing lease expires or before your ideal move-in-date. Finding the right space and negotiating the deal alonewill require 1-2 months depending on the size area and current market conditions. Typically the spaces you like will require some type of improvements which the time needed will depend on the scope of work.
Thoroughly research your company’s present and future needs. Consult with the various department heads for input as well as some key employees.
Get familiar with allthe commercial space terms and meanings. Various landlords say and quote things differently. If you are in doubt about what they mean do not be afraid to ask them to supply more info.
If you are not familiar with the commercial property leasing process or the present market conditions then consider engaging the help of a tenant rep. Their services do not cost anything because landlords compensate all of the rental fees. The landlord rep will have an professional listing agent representing them so it would be a good idea for you to have one too.
Physically visit 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 who owns the property, property amenities, required lease term length, how much the landlord is prepared to give in tenant construction allowances, etc..
Don’t settle for the first commercial space you believe is suitable for your needs: continue searching until you have at least 2 to 3 alternative options. These additional options will work to your advantage since you will know what to expect during the lease negotiations and you’ll gain more leverage with multiple landlords 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 options. These are not legally binding. You never need to have a landlord representative’s verbal note. Everything should be in writing.
To help you decide what property is best suited for your company, prepare a spreadsheet to do an apples to apples comparison of each property. A few of the things you should put into consideration include the size of the space, the asking foundation rental rates, the required 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 are budget conscious then you can quickly narrow down the list by simply calculating the monthly base rents for each property then eliminating those that are way above your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate and any operating expenditures then dividing by 12.
If some of the commercial spaces require tenant improvements then it’s important that you figure out 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 need to pay above and beyond what the landlord is prepared to give.
Carefully examine and compare the terms of each proposal. Consider whether it makes sense to return to each landlord to negotiate additional concessions. Make sure you completely understand the total expenses you are expected to cover. Don’t get emotionally attached to a specific property until the discussions are over. Emotional attachment might lead to 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 the commercial rental contract.
Now it’s time to review 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 could review the lease with you as well. Industrial lease language could be negotiated. If you do not like certain lease items or want to propose new language now is the time to do so.
When the end of rental contract negotiations has finished the building owner will provide you a draft of the lease to review and sign.
There are many more things to think about when renting commercial property however these ideas will help get you started. If you are a new company renting commercial space for the first time or an existing company who has only rented 1 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.