Before you begin looking for an excellent warehouse space for rent for your startup, you will need to get informed about the commercial property leasing process. Being ready will prevent you from making impulsive decisions and costly mistakes thatyou will end up regretting later on. Below are some insider tips to help make an informed choice when letting a commercial warehouse space your business
Initiate the process of searching for commercial space for lease at least 6-12 months before your current lease expires or before your perfect move-in-date. Locating the perfect space and negotiating the deal will take 1-2 months depending on the size space and current market conditions. In most cases the spaces you like will need some sort of tenant improvements which the time required will depend on the scope of work.
completely examine your business’s current and future needs. Consult with the various department heads for input in addition to some key employees.
Get acquainted with allthe commercial space terms and meanings. Various landlords state and quote things otherwise. If you’re unsure about what they mean do not be afraid to ask them to supply more information.
If you’re not knowledgeable about the commercial real estate leasing process or the current market conditions then consider engaging the help of a tenant agent. Their services do not cost anything since building owners compensate all of the rental fees. The landlord representative will have an expert listing agent representing them so it would be a good idea for you to have one also.
Personally tour all of the spaces that meet your needs so thatyou can make a short list. Bear in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord representatives a lot of questions regarding the ownership, property amenities, required lease term length, how much the landlord is willing to give in tenant improvement allowances, etc..
Don’t settle for the first commercial properties you think is acceptable for your needs: continue looking until you have at least 2 to three alternative choices. 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 business. They also give you something to fall back to whether the discussions to your first choice go sideways.
Send out proposals to your top three to five choices. 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 business, prepare a spreadsheet to do an apples to apples comparison of every property. A few of the things you need to put into consideration include the dimensions of the space, the asking foundation rental rates, the required lease duration, and the incremental costs (taxes, insurance, maintenance, etc). You can also take note about the advantages and disadvantages 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 eliminating those that are way over your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate and any operating expenses then dividing by 12.
If some of the commercial spaces need tenant improvements then it is important that you determine 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 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 every landlord to negotiate additional concessions. Make certain you completely understand the total expenses you’re expected to cover. Don’t get emotionally attached to a certain 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’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 review 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 as well. Commercial lease language can be negotiated. If you do not like particular lease items or would like to propose new language now is the time to do so.
When the end of rental contract negotiations has finished the landlord will supply you a copy of the lease to review and sign.
There are many more things to think about when leasing commercial property however these ideas will help get you going. If you’re a new business leasing commercial property for the first time or an current business who has only rented 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.