Before you start searching for a good warehouse space for rent for your small business,you should to get educated about the commercial warehouse leasing procedure. Being ready will keep you from making hurried 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 real estate your company
Initiate the process of searching commercial space at least 6-12 months before your current lease expires or before your ideal move-in-date. Finding the right space and negotiating the deal alonewill take 1-2 months depending on the size space and current market conditions. In most cases the spaces you like will require some type 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 various department heads for input in addition to some key employees.
Get familiar with allthe commercial real estate 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 get more info.
If you are not knowledgeable about the commercial real estate leasing process or the present market conditions then consider engaging the assistance of a tenant rep. Their services do not cost anything because landlords compensate all of the rental commissions. The landlord representative will have an experienced listing agent advising them so it would be a good idea for you to have one as well.
Personally tour all of the spaces that meet your requirements so you can make a brief list. Keep in mind that the designs 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 improvement allowances,etc..
Do not settle for the first commercial properties you think is suitable for your requirements: continue searching until you have at least two to three alternative choices. These extra options will work to your advantage because you will know what to expect throughout the lease negotiations and you will gain more leverage with multiple landlords competing for your business. They also give you something to fall back to if the discussions for your first choice go sideways.
Send out proposals to your top three to five choices. These are not legally binding. You don’t ever want 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 each property. Some of the things you need to consider include the size of this distance,the asking base rental rates,the necessary lease term,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 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 commercial space square feet by the asking base rate and any operating expenses then dividing by 12.
If any of the commercial properties require changes then it is important that you figure out what improvements you want on each and get construction bids. This way if the building owner is offering a finish out allowance you will learn just how much out of pocket you will have to pay over and beyond what the building owner is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it makes sense to go back to each landlord to negotiate extra concessions. Make sure you completely understand the total expenses you are expected to cover. Do not get emotionally attached to a specific property until the discussions are over. Emotional attachment might result in you signing a contract your business cannot 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 this 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 could review the lease with you as well. Industrial lease language could be negotiated. If you do not like particular lease items or want to propose new language today is the time to do so.
Once the end of rental contract negotiations has ended the building owner will give you a copy of the lease to sign.
There are several more things to think about when leasing commercial property however these suggestions will help get you started. If you are a new business leasing commercial property for the first time or an current business who has just leased one or two spaces then consider getting help from a tenant representative. Their services do not cost you anything and you will save a lot of time and money.