Before you begin looking for the perfect warehouse space for rent for your small company, you will need to get informed about the commercial warehouse leasing process. Being prepared will keep you from making hurried decisions and costly mistakes thatyou will regret later on. Below are some insider tips to help make an informed decision when renting a commercial real estate your company
Initiate the process of finding commercial space at least 6-12 months before your current lease expires or before your perfect move-in-date. Locating the correct space and negotiating the deal will take 1-2 months depending upon the size area and current market conditions. Typically the spaces you like will need some type of modifications which the time required will depend on the scope of work.
Thoroughly research your company’s present 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. Different landlords say and quote things differently. If you’re in doubt about what they mean don’t be afraid to ask them to provide more information.
If you’re not familiar with the commercial property leasing process or the present market conditions then consider engaging the help of a tenant rep. Their services don’t cost anything because landlords compensate all of the leasing commissions. The landlord agent will have an knowledgable listing agent representing them so it would be a good idea for you to have one as well.
Personally visit all of the spaces that meet your requirements so thatyou can make a brief list. Bear in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord reps a great deal 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 space you think is acceptable for your requirements: continue looking until you have at least 2 to three alternative choices. These additional options will work to your benefit since you will know what to expect during the lease negotiations and you’ll gain more leverage with numerous landlords competing for your tenancy. They also give you something to fall back to if the negotiations to your first choice go sideways.
Send out proposals to your top three to five choices. These are not legally binding. You never want to have a landlord agent’s verbal note. Everything needs to be in writing.
To help you decide what property is best suited 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 dimensions of this space, the inquiring foundation rental rates, the required lease duration, and the incremental costs (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 industrial space square feet from the asking base rate plus any operating expenditures then dividing by 12.
If any of the commercial spaces need tenant improvements then it’s important that you determine what improvements you want on each and get preliminary bids. This way if the landlord is offering a tenant improvement allowance you will know just how much out of pocket you’ll 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 each landlord to negotiate additional concessions. Make sure you completely understand the total expenses you’re expected to cover. Don’t get emotionally attached to a specific property until the negotiations are over. Emotional attachment might result in you signing a contract thatyour business cannot live up to.
After negotiations are finalized and you have made your selection now it is time to have the landlord provide you the first draft of this commercial rental contract.
Now it is time to reassess the commercial rental contract. It would be wise 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 particular lease items or want to propose new language now is the time to do so.
Once the end of rental contract negotiations has ended the landlord will give you a copy of the lease to sign.
There are many more things to consider when leasing commercial property however these suggestions will help get you going. If you’re a new company leasing commercial space for the first time or an current company who has only leased 1 or 2 spaces then consider getting help from a tenant agent. Their services do not cost you anything and you’ll save a lot of time and money.