Leasing Commercial Warehouse Property For Startups

Before you begin looking for the perfect warehouse space for rent for your business, you need to get informed about the commercial warehouse leasing procedure. Being ready will keep you from making impulsive decisions and costly mistakes thatyou will probably regret later on. Below are some insider suggestions to help make an informed choice when leasing a commercial real estate your company

Start the process of searching commercial space at least 6-12 months before your existing lease expires or until your perfect 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. Typically the spaces you like will need some sort of improvements that the time required will depend on the scope of work.

Thoroughly analyze your company’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. Different landlords state and quote things differently. If you are unsure about what they mean do not be afraid to ask them to provide more info.

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 anything because building owners compensate all of the leasing commissions. The landlord representative will have an expert listing agent advising them so it would be a great idea for you to have one as well.

Physically visit all of the spaces that meet your requirements so thatyou can make a short list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord agents a great deal of questions regarding the ownership, 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 space you think is acceptable for your requirements: continue searching 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 throughout the lease negotiations and you will gain more leverage with numerous building owners competing for your business. They also give you something to fall back to if the discussions to your first choice fall through.

Send out proposals to your top three to five choices. These are not legally binding. You don’t ever need to have a landlord agent’s verbal word. Everything should be in writing.

To help you decide what property is best suited for your business, prepare a spreadsheet to do an apples to apples comparison of each property. A few of the things you should put into consideration include the dimensions of this space, the asking foundation 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 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 from the asking base rate and any operating expenses then dividing by 12.

If any of the commercial spaces need tenant improvements then it is important that you figure out what improvements you want on each and get preliminary bids. That way if the landlord is offering a tenant improvement allowance you will learn how much out of pocket you will have 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 extra concessions. Be certain you fully understand the total expenses you are 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 thatyour business cannot live up to.

After discussions are finalized and you’ve made your selection now it is time to have the landlord provide you the first draft of this commercial rental contract.

Now it is time to review the commercial rental contract. It would be advisable for you to hire an attorney to review the lease. If you have a tenant representative then they can review the lease with you also. Industrial lease language can be negotiated. If you do not like certain 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 draft of the lease to sign.

There are several more things to consider when leasing commercial real estate however these tips will help get you going. If you are a new business leasing commercial property for the first time or an existing business who has only rented 1 or 2 spaces then consider getting help from a tenant representative. Their services do not cost you anything and you will save a great deal of money and time.