Before you begin looking for a good warehouse space for rent for your startup, you should to get educated about the commercial warehouse leasing procedure. Being ready should prevent you from making foolish decisions and costly mistakes thatyou will probably regret later on. The following are some insider suggestions to help make an informed decision when renting a commercial property your business
Start the process of locating commercial space at least 6-12 months before your current lease terminates or before your ideal move-in-date. Finding the right space and negotiating the deal will take 1-2 months depending on the size area and current market conditions. Typically the spaces you like will require some type of tenant improvements that the time required will depend on the scope of work.
completely examine your business’s present and future needs. Consult with the various department heads for input in addition to some key employees.
Get acquainted with the commercial property terms and definitions. Various landlords state and quote things differently. If you’re unsure about what they mean don’t be afraid to ask them to supply more info.
If you’re not familiar with the commercial rental process or the present market conditions then consider engaging the assistance of a tenant rep. Their services don’t cost you anything since landlords compensate all of the rental commissions. The landlord agent will have an experienced listing agent advising them so it would be a good idea for you to have one too.
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 about the ownership, 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 believe is suitable for your needs: continue searching until you have at least 2 to 3 other options. These additional options will work to your advantage because you will know what to expect during 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 whether the negotiations for your first choice go sideways.
Send out proposals to your top three to five options. These are not legally binding. You don’t ever need to have a landlord agent’s verbal word. 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. Some of the things you need to put into consideration include the dimensions of this space, the asking foundation rental rates, the required lease term, and the incremental costs (taxes, insurance, maintenance, etc). It is also possible to take note about the advantages and disadvantages 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 eliminating those which are way over your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate plus 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. This way if the landlord is offering a tenant improvement allowance you will know how much out of pocket you will have to pay over and beyond what the landlord is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to go back to every landlord to negotiate extra concessions. Make certain you completely understand the total expenses you’re expected to cover. Do not 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 have 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 wise for you to hire an attorney to review the lease. If you have a tenant representative then they could review the lease with you as well. Industrial lease language could be negotiated. If you don’t like particular lease items or want to propose new language now is the time to do so.
When the end of lease contract negotiations has ended the landlord will give you a draft of the lease to review.
There are several more things to think about when leasing commercial property however these suggestions will help get you started. If you’re a new business leasing space for the first time or an current business who has only leased 1 or 2 spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you will save a lot of time and money.