Before you start searching for an excellent warehouse space for rent for your company, you should to get educated about the commercial warehouse leasing procedure. Being ready should prevent you from making hurried decisions and costly mistakes you will end up regretting in the future. The following are some insider suggestions to help make an informed decision when letting a commercial property your business
Initiate the process of hunting for commercial space at least 6-12 months before your current lease terminates or until your ideal move-in-date. Finding the correct space and negotiating the deal alonewill 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 business’s current and future needs. Consult with the various department heads for input as well as some key employees.
Get acquainted with allthe commercial space terms and meanings. Various landlords say and quote things differently. If you’re in doubt about what they mean do not be afraid to ask them to get more information.
If you’re not familiar with the commercial property leasing process or the current market conditions then consider engaging the help of a tenant rep. Their services do not cost anything because building owners compensate all the rental fees. The landlord rep will have an knowledgable listing agent advising them so it would be a great idea for you to have one too.
Personally tour all the properties that meet your requirements so you 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 about who owns the property, 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 properties you think is suitable for your requirements: continue searching until you have at least two to three alternative choices. These extra options will work to your advantage since you will know what to expect throughout the lease negotiations and you will gain more leverage with multiple building owners competing for your tenancy. They also give you something to fall back to if the discussions for your first choice fall through.
Send out proposals to your top three to five choices. These are not legally binding. You never need to have a landlord representative’s verbal note. Everything should 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. A few of the things you need to put into consideration include the size of the distance, the inquiring foundation rental rates, the required lease term, 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 simply calculating the monthly base rents for each property then removing those which are way over your budget. The monthly base rent is calculated by multiplying the commercial space square feet by the asking base rate and any operating expenditures then dividing by 12.
If any of the commercial property need finish out then it is important that you figure out what improvements you want on each and get construction bids. That way if the building owner is offering a construction allowance you will know just how much out of pocket you will have to pay over and beyond what the building owner is willing to give.
Carefully examine and compare the terms of each proposal. Consider whether it is logical to go back to every 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 discussions are over. Emotional attachment might result in you signing a contract your business cannot live up to.
After discussions are finalized and you have made your selection now it is time to have the landlord offer you the first draft of the commercial lease contract.
Now it is time to review the commercial lease contract. It would be advisable for you to hire an attorney to review the lease. If you have a tenant agent then they could review the lease with you as well. Commercial lease language could be negotiated. If you do not like particular lease items or want to propose new language today is the time to do so.
When the end of lease contract negotiations has finished the building owner will provide 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’re a new company leasing space for the first time or an current company who has only rented 1 or two spaces then consider getting help from a tenant rep. Their services do not cost you anything and you will save a great deal of time and money.