Before you begin looking for a good for your startup company, you need to get educated about the commercial warehouse leasing procedure. Being ready will keep you from making rash decisions and costly mistakes thatyou will end up regretting later on. The following are some insider suggestions to help make an informed choice when renting a commercial warehouse space your company
Start the process of finding commercial space for lease at least 6-12 months before your current lease expires or before your ideal move-in-date. Locating the perfect space and negotiating the deal will take 1-2 months depending on the size area and current market conditions. In most cases the spaces you like will need some type of changes which the time required will depend on the scope of work.
completely research your business’s current and future needs. Consult with the different department heads for input in addition to some key employees.
Get acquainted with allthe commercial property terms and definitions. Various landlords state and quote things differently. If you’re in doubt about what they mean do not be afraid to ask them to supply more information.
If you’re not knowledgeable about the commercial leasing process or the current market conditions then consider engaging the assistance of a tenant representative. Their services do not cost anything since building owners pay all the rental commissions. The landlord representative will have an expert listing agent advising them so it would be a good idea for you to have one also.
Personally see all the spaces that meet your requirements so thatyou can make a short 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 who owns the property, 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 space you think is suitable for your requirements: continue looking until you have at least 2 to 3 alternative choices. These additional options will work to your advantage since you will know what to expect during the lease negotiations and you’ll gain more leverage with numerous building owners competing for your company. They also give you something to fall back to whether the negotiations for your first choice fall through.
Send out proposals to your top three to five choices. These aren’t legally binding. You don’t ever need to have a landlord representative’s verbal note. Everything should 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 should put into consideration include the size of the space, the inquiring foundation rental rates, the necessary 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’re budget conscious then you can quickly narrow down the list by simply 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 expenses then dividing by 12.
If some of the commercial buildings need tenant improvements then it is essential that you figure out what changes you want on each and get bids from contractors. That way if the landlord is offering a tenant improvement allowance you will learn just how much out of pocket you’ll need to pay above and beyond what the landlord 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 fully understand the total expenses you’re expected to cover. Don’t get emotionally attached to a certain property until the negotiations are over. Emotional attachment might result in you signing a contract thatyour business can’t 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 the 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. For those who 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 certain lease items or want to propose new language today is the time to do so.
When the end of rental contract negotiations has ended the building owner will give you a copy of the lease to review and sign.
There are several more things to consider when renting commercial property however these suggestions will help get you started. If you’re a new company renting commercial property for the first time or an current company who has just leased 1 or 2 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.