Before you begin looking for a good warehouse space for rent for your business, you must to get educated about the commercial real estate leasing procedure. Being ready will prevent you from making rash decisions and costly mistakes thatyou will come to regret in the future. The following are some insider tips to help make an informed decision when renting a commercial real estate your company
Initiate the process of hunting for commercial space at least 6-12 months before your existing lease terminates or before your perfect move-in-date. Locating the right space and negotiating the deal alonewill take 1-2 months depending upon the size space and current market conditions. Typically the spaces you like will require some type of improvements which 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 property terms and definitions. Different landlords say and quote things otherwise. If you are in doubt about what they mean do not be afraid to ask them to provide more information.
If you are not familiar with the commercial rental process or the current market conditions then consider engaging the assistance of a tenant representative. Their services do not cost you anything since landlords compensate all of the rental commissions. The landlord agent will have an knowledgable listing agent helping them so it would be a good idea for you to have one too.
Personally 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 representatives a lot of questions about the ownership, 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 believe is acceptable for your requirements: continue searching until you have at least 2 to three alternative options. These additional options will work to your advantage since you will know what to expect during the lease negotiations and you will gain more leverage with multiple landlords competing for your business. They also give you something to fall back to whether the discussions for your first choice go sideways.
Send out proposals to your top three to five options. These are not legally binding. You don’t ever need to take a landlord agent’s verbal note. Everything needs to 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 every property. A few of the things you should put into consideration include the size of the space, the inquiring base rental rates, the required lease duration, and the incremental costs (taxes, insurance, maintenance, etc). It is also possible to take note about the advantages and disadvantages of each property. If you are 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 over your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate and any operating expenditures then dividing by 12.
If any of the commercial spaces require improvements then it is important that you figure out what changes you want on each and get preliminary bids. That way if the building owner is offering a finish out allowance you will learn how much out of pocket you will need to pay over and beyond what the building owner is prepared to give.
Carefully examine and compare the terms of each proposal. Consider whether it makes sense to go back to every landlord to negotiate additional concessions. Make sure you fully understand the total expenses you are 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 cannot live up to.
After discussions are finalized and you’ve made your selection now it is time to have the landlord offer you the first draft of the commercial rental contract.
Now it is 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. Industrial lease language can 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 building owner will provide you a copy of the lease to review and sign.
There are many more things to consider when renting commercial space however these ideas will help get you going. If you are a new business renting space for the first time or an existing business who has only rented 1 or 2 spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you will save a great deal of time and money.