Before you begin looking for the perfect warehouse space for rent for your small company, you need to get educated about the commercial space leasing procedure. Being prepared will help prevent you from making rapid decisions and costly mistakes you will come to regret in the future. The following are some insider suggestions to help make an informed decision when renting a commercial warehouse space your company
Initiate the process of hunting for commercial space at least 6-12 months before your existing lease expires or until your perfect move-in-date. Finding the right space and negotiating the deal alonewill take 1-2 months depending upon the size space and current market conditions. Typically the spaces you like will require some sort of tenant improvements which the time needed will depend on the scope of work.
completely research your company’s present and future needs. Consult with the different department heads for input as well as some key employees.
Get acquainted with the commercial property terms and definitions. Different landlords state and quote things differently. If you’re unsure about what they mean don’t be afraid to ask them to supply more information.
If you’re not knowledgeable about the commercial real estate leasing process or the present market conditions then consider engaging the assistance of a tenant representative. Their services don’t cost you anything because building owners pay all of the leasing commissions. The landlord rep will have an expert listing agent representing 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 you can make a short list. Keep in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord agents a great deal of questions regarding the ownership, property amenities, required lease term length, how much the landlord is prepared to give in tenant improvement allowances, etc..
Do not settle for the first commercial space you believe is suitable for your needs: continue searching 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 negotiations for your first choice go sideways.
Send out proposals to your top three to five choices. These aren’t legally binding. You don’t ever need to have a landlord representative’s verbal note. 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. A few of the things you need to consider include the size of this distance, the inquiring 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’re budget conscious then you can quickly narrow down the list by simply calculating the monthly base rents for each property then eliminating those which are way over 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 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 learn just how much out of pocket you’ll have to pay over 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 additional concessions. Make certain you fully understand the total expenses you’re expected to cover. Do not get emotionally attached to a specific property until the negotiations are over. Emotional attachment might lead to you signing a contract your business can’t live up to.
After negotiations are finalized and you’ve made your selection now it’s time to have the landlord offer you the first draft of this commercial lease contract.
Now it’s time to reassess the commercial lease contract. It would be advisable for you to hire an attorney to review the lease. If you have a tenant agent then they could review the lease with you also. Commercial lease language could be negotiated. If you don’t like certain lease items or want to propose new language today is the time to do so.
Once the end of lease contract negotiations has finished the building owner will provide you a copy of the lease to review.
There are several more things to think about when leasing commercial space however these suggestions will help get you going. If you’re a new company leasing commercial space for the first time or an existing company who has only 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 lot of money and time.