Before you begin looking for a great warehouse space for rent for your small company, you need to get informed about the commercial space leasing process. Being prepared will prevent you from making expeditious decisions and costly mistakes you will probably regret in the future. Below are some insider suggestions to help make an informed decision when renting a commercial space your company
Start the process of searching for commercial warehouse space at least 6-12 months before your existing lease expires or until your ideal move-in-date. Locating the correct space and negotiating the deal alonewill require 1-2 months depending upon the size area and current market conditions. In most cases the spaces you like will require some sort of improvements which the time needed will depend on the scope of work.
completely analyze your company’s current and future needs. Consult with the various department heads for input as well as some key employees.
Get acquainted with the commercial real estate terms and definitions. Various landlords state and quote things otherwise. If you are in doubt about what they mean don’t be afraid to ask them to provide more info.
If you are not familiar with the commercial property leasing process or the current market conditions then consider engaging the assistance of a tenant representative. Their services don’t cost anything because building owners compensate all of the rental fees. The landlord rep will have an professional listing agent advising them so it would be a good idea for you to have one also.
Personally see all of the spaces that meet your requirements so you can make a brief 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 about 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 space you believe is suitable for your requirements: continue looking until you have at least two to 3 other choices. These extra options will work to your advantage since you will know what to expect throughout the lease negotiations and you’ll gain more leverage with multiple building owners 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 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 company, prepare a spreadsheet to do an apples to apples comparison of every 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 advantages and disadvantages of each property. If you are 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 from the asking base rate plus any operating expenditures then dividing by 12.
If some of the commercial spaces require improvements then it’s important that you figure out what changes you want on each and get construction bids. This way if the landlord is offering a tenant improvement allowance you will know how much out of pocket you’ll need 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 return to every landlord to negotiate additional concessions. Be certain you fully understand the total expenses you are expected to cover. Do not get emotionally attached to a certain 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 is time to have the landlord provide you the first draft of this commercial rental contract.
Now it is time to review the commercial rental contract. It would be wise for you to hire an attorney to review the lease. If you have a tenant representative then they can review the lease with you also. Industrial lease language can be negotiated. If you don’t like particular lease items or would like to propose new language today is the time to do so.
When the end of rental contract negotiations has finished the landlord will give you a copy of the lease to review and sign.
There are many more things to think about when renting commercial space however these tips will help get you going. If you are a new company renting commercial space for the first time or an existing company who has only leased 1 or two spaces then consider getting help from a tenant rep. Their services do not cost you anything and you’ll save a lot of time and money.