Before you start searching for a great warehouse space for rent for your small business,you must to get educated about the commercial warehouse leasing process. Being ready should help prevent you from making rash decisions and costly mistakes thatyou will probably regret later on. The following are some insider suggestions to help make an informed choice when letting a commercial real estate your business
Start the process of hunting commercial space at least 6-12 months before your existing 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 space and current market conditions. Typically the spaces you like will need some type of improvements which the time required will depend on the scope of work.
completely examine your business’s current and future needs. Consult with the various department heads for input as well as some key employees.
Get familiar with allthe commercial space terms and meanings. Various landlords state and quote things differently. If you’re unsure about what they mean don’t be afraid to ask them to provide more info.
If you’re not familiar with the commercial leasing process or the current market conditions then consider engaging the assistance of a tenant agent. Their services don’t cost you anything since building owners compensate all of the leasing fees. The landlord agent will have an experienced listing agent advising them so it would be a good idea for you to have one also.
Physically visit all of the spaces that meet your requirements so thatyou can make a short list. Keep in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord agents a great deal of questions regarding who owns the property,property amenities,required lease duration,how much the landlord is prepared to give in tenant construction allowances,etc..
Do not settle for the first commercial properties you think is acceptable for your requirements: continue looking until you have at least 2 to 3 other options. These extra options will work to your advantage because 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 to your first choice go sideways.
Send out proposals to your top three to five options. These aren’t legally binding. You don’t ever need to take a landlord agent’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 every property. Some of the things you need to put into consideration include the size of this space,the asking foundation 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’re 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 above your budget. The monthly base rent is calculated by multiplying the commercial space square feet from the asking base rate plus any operating expenditures then dividing by 12.
If any of the commercial spaces need tenant improvements then it’s important that you determine what improvements you want on each and get preliminary bids. That way if the landlord is offering a tenant improvement allowance you will learn just how much out of pocket you will need to pay above and beyond what the landlord is prepared 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 completely understand the total expenses you’re expected to cover. Do not get emotionally attached to a specific property until the discussions are over. Emotional attachment might result in you signing a contract thatyour business can’t live up to.
After discussions are finalized and you have made your selection now it’s time to have the landlord provide you the first draft of this commercial rental contract.
Now it’s time to reassess the commercial rental contract. It would be wise for you to hire an attorney to review the lease. If you have a tenant agent then they can review the lease with you as well. Commercial lease language can be negotiated. If you don’t like particular lease items or would like to propose new language now is the time to do so.
Once 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 think about when renting commercial space however these tips will help get you going. If you’re a new company renting space for the first time or an existing company who has only leased 1 or 2 spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you will save a lot of money and time.