Before you begin searching for a good warehouse space for rent for your startup, you will need to get informed about the commercial warehouse leasing procedure. Being prepared will help prevent you from making expeditious decisions and costly mistakes you will regret in the future. Below are some insider suggestions to help make an informed decision when leasing a commercial property your company
Initiate the process of hunting commercial space at least 6-12 months before your current lease expires or before your ideal move-in-date. Finding the correct space and negotiating the deal will require 1-2 months depending upon the size area and current market conditions. In most cases the spaces you like will need some sort of improvements which the time required 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 familiar with allthe commercial space terms and meanings. Different landlords state and quote things differently. If you are unsure about what they mean do not be afraid to ask them to provide more information.
If you are not knowledgeable about the commercial rental process or the current market conditions then consider engaging the assistance of a tenant rep. Their services do not cost anything since landlords compensate all the rental commissions. The landlord representative will have an knowledgable listing agent helping them so it would be a great idea for you to have one also.
Personally see all the spaces that meet your needs 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 representatives a lot of questions regarding the ownership, property amenities, required lease duration, 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 two to three alternative options. These additional options will work to your benefit because you will know what to expect during the lease negotiations and you’ll gain more leverage with multiple landlords competing for your business. They also give you something to fall back to whether the negotiations to your first choice go silent.
Send out proposals to your top three to five options. These are not legally binding. You don’t ever want to take a landlord agent’s verbal word. Everything should be in writing.
To help you decide what property is most suitable for your business, prepare a spreadsheet to do an apples to apples comparison of each property. A few of the things you should consider include the dimensions of the distance, the inquiring base rental rates, the required 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 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 above your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate plus any operating expenditures then dividing by 12.
If some of the commercial property need changes 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 above and beyond what the landlord is willing to give.
Carefully examine and compare the terms of each proposal. Consider whether it is logical to return to each landlord to negotiate extra concessions. Be sure you completely understand the total expenses you are expected to cover. Do not get emotionally attached to a specific property until the negotiations are over. Emotional attachment might result in you signing a contract your business cannot live up to.
After negotiations are finalized and you’ve made your selection now it’s time to have the landlord offer you the first draft of the commercial rental contract.
Now it’s time to review the commercial rental contract. It would be advisable for you to hire an attorney to review the lease. For those who have a tenant representative then they could review the lease with you also. Commercial lease language could be negotiated. If you do not like certain lease items or want to propose new language now is the time to do so.
When the end of rental contract negotiations has ended the landlord will provide you a copy of the lease to review.
There are several more things to consider when renting commercial property however these tips will help get you started. If you are a new business renting commercial space for the first time or an current business who has just rented one or two spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you’ll save a great deal of time and money.