Before you start looking for a great warehouse space for your small company, you should to get educated about the commercial property leasing procedure. Being ready will help prevent you from making impulsive decisions and costly mistakes thatyou will probably regret in the future. Below are some insider suggestions to help make an informed decision when leasing a commercial warehouse space your business
Initiate the process of hunting commercial space at least 6-12 months before your current lease expires or before your perfect 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 need some type of improvements that the time needed will depend on the scope of work.
completely research your company’s present and future needs. Consult with the different department heads for input in addition to some key employees.
Get familiar with allthe commercial real estate terms and meanings. Various landlords state and quote things differently. If you are in doubt about what they mean do not be afraid to ask them to supply more info.
If you are not familiar with the commercial rental process or the present market conditions then consider engaging the help of a tenant representative. Their services do not cost you anything because landlords compensate all the rental fees. The landlord representative will have an professional listing agent representing them so it would be a great idea for you to have one also.
Personally see all the properties that meet your requirements so thatyou can make a short list. Keep in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord agents 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..
Don’t settle for the first commercial properties you think is suitable for your requirements: continue searching until you have at least two to three other choices. These extra options will work to your benefit because you will know what to expect during the lease negotiations and you’ll gain more leverage with numerous landlords competing for your business. They also give you something to fall back to if the discussions 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 most suitable for your company, prepare a spreadsheet to do an apples to apples comparison of each property. Some of the things you need to consider include the dimensions of this distance, the inquiring foundation 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 calculating the monthly base rents for each property then eliminating those that are way over 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 is important that you determine what improvements you want on each and get construction bids. This way if the building owner is offering a construction allowance you will know how much out of pocket you’ll 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 is logical to go back to each landlord to negotiate additional concessions. Be sure you completely understand the total expenses you are expected to cover. Don’t get emotionally attached to a specific property until the discussions are over. Emotional attachment might lead to you signing a contract thatyour business cannot live up to.
After discussions 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 advisable for you to hire an attorney to review the lease. For those who have a tenant agent then they can review the lease with you as well. Commercial lease language can be negotiated. If you do not like particular lease items or would like to propose new language now is the time to do so.
Once the end of lease contract negotiations has finished the building owner will give you a copy of the lease to review.
There are several more things to think about when leasing commercial real estate however these suggestions will help get you started. If you are a new company leasing commercial property for the first time or an current company who has only leased 1 or two spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you’ll save a lot of money and time.