Techniques For Attaining The Very Best Contract When Hunting For Industrial Warehouse Space For Rent
Before you begin searching for a great warehouse space for rent for your startup, you should to get educated about the commercial warehouse leasing process. Being ready should keep you from making foolish decisions and costly mistakes thatyou will come to regret in the future. Below are some insider tips to help make an informed choice when renting a commercial real estate your business
Initiate the process of searching commercial space at least 6-12 months before your current lease expires or before your ideal move-in-date. Finding the right space and negotiating the deal will require 1-2 months depending upon the size space and current market conditions. In most cases the spaces you like will need some type of improvements that the time needed will depend on the scope of work.
Thoroughly analyze 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 property terms and meanings. Different landlords say and quote things otherwise. If you’re unsure about what they mean don’t be afraid to ask them to get more information.
If you’re not knowledgeable about the commercial rental process or the present market conditions then consider engaging the support of a tenant agent. Their services don’t cost anything since building owners pay all of the rental fees. The landlord agent will have an experienced listing agent advising them so it would be a great idea for you to have one as well.
Physically tour all of the spaces that meet your needs 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 reps a lot of questions about who owns the property, property amenities, required lease duration, how much the landlord is prepared to give in tenant improvement allowances, etc..
Don’t settle for the first commercial properties you think is suitable for your needs: continue looking until you have at least 2 to 3 alternative choices. These extra options will work to your benefit since you will know what to expect during the lease negotiations and you’ll gain more leverage with numerous building owners 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 choices. These are not legally binding. You don’t ever want 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 need to consider include the size of this distance, the inquiring foundation rental rates, the necessary lease term, and the incremental costs (taxes, insurance, maintenance, etc). You can also 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 eliminating those which are way above your budget. The monthly base rent is calculated by multiplying the commercial space square feet by the asking base rate plus any operating expenditures then dividing by 12.
If some of the commercial properties 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 landlord is offering a finish out allowance you will learn how much out of pocket you’ll 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 makes sense to go back to each landlord to negotiate extra concessions. Make certain you fully understand the total expenses you’re expected to cover. Don’t get emotionally attached to a certain 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 is time to have the landlord offer you the first draft of this commercial lease contract.
Now it is time to reassess the commercial lease contract. It would be wise for you to hire an attorney to review the lease. If you have a tenant representative then they can review the lease with you as well. Commercial lease language can be negotiated. If you don’t like certain 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 landlord will supply you a copy of the lease to review and sign.
There are several more things to think about when leasing commercial space however these tips will help get you started. If you’re a new company leasing commercial space for the first time or an current company who has only leased one or 2 spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you’ll save a lot of money and time.