Before you start looking for a good warehouse space for rent for your business,you need to get educated about the commercial space leasing procedure. Being ready should help prevent you from making rapid decisions and costly mistakes thatyou will regret later on. Below are some insider suggestions to help make an informed choice when letting a commercial space your business
Initiate the process of hunting commercial space at least 6-12 months before your current lease expires or until your ideal move-in-date. Finding the correct space and negotiating the deal alonewill require 1-2 months depending upon the size space and current market conditions. In most cases the spaces you like will need some type of improvements that the time needed will depend on the scope of work.
Thoroughly analyze your business’s current and future needs. Consult with the different department heads for input as well as some key employees.
Get acquainted with allthe commercial property terms and definitions. Various landlords state and quote things otherwise. If you’re in doubt about what they mean do not be afraid to ask them to provide more info.
If you’re not familiar with the commercial leasing process or the current market conditions then consider engaging the help of a tenant agent. Their services do not cost anything since landlords pay all of the leasing commissions. The landlord rep will have an experienced listing agent helping them so it would be a great idea for you to have one also.
Physically tour all of the spaces 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 lot of questions regarding who owns the property,property amenities,required lease term length,how much the landlord is willing to give in tenant construction allowances,etc..
Don’t settle for the first commercial space you think is suitable for your requirements: continue searching until you have at least 2 to three other choices. These additional options will work to your benefit because you will know what to expect throughout the lease negotiations and you will gain more leverage with numerous landlords competing for your business. They also give you something to fall back to if the negotiations to your first choice fall through.
Send out proposals to your top three to five choices. These are not legally binding. You don’t ever need to take a landlord agent’s verbal word. Everything needs to 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 should put into consideration include the size of the distance,the asking foundation 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 calculating the monthly base rents for each property then removing those that are way above your budget. The monthly base rent is calculated by multiplying the commercial space square feet by the asking base rate and any operating expenses then dividing by 12.
If any of the commercial spaces need tenant improvements then it’s 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 will have to pay above and beyond what the landlord is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it makes sense to go back to every landlord to negotiate extra concessions. Be sure you completely understand the total expenses you’re expected to cover. Don’t get emotionally attached to a certain property until the negotiations are over. Emotional attachment might result in you signing a contract thatyour business can’t 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 the commercial rental contract.
Now it’s time to reassess the commercial rental 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. Industrial lease language could be negotiated. If you do not like certain lease items or would like to propose new language today is the time to do so.
Once the end of rental contract negotiations has finished the landlord will provide you a draft of the lease to review.
There are many more things to think about when leasing commercial space however these tips will help get you going. If you’re a new business leasing 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 rep. Their services don’t cost you anything and you will save a great deal of money and time.