Before you start searching for a good warehouse space for rent for your startup company,you will need to get informed about the commercial warehouse leasing procedure. Being prepared will keep you from making rash decisions and costly mistakes thatyou will probably regret in the future. Below are some insider tips to help make an informed choice when leasing a commercial real estate your company
Start the process of finding commercial space at least 6-12 months before your existing lease terminates or before your ideal move-in-date. Locating the right space and negotiating the deal will require 1-2 months depending on the size area and current market conditions. Typically the spaces you like will need some type of tenant improvements which the time required will depend on the scope of work.
Thoroughly analyze your business’s current and future needs. Consult with the various department heads for input as well as some key employees.
Get familiar with the commercial space terms and meanings. Various landlords say and quote things differently. If you’re unsure about what they mean do not be afraid to ask them to supply more information.
If you’re not familiar with the commercial property leasing process or the current market conditions then consider engaging the help of a tenant rep. Their services do not cost you anything because landlords compensate all the rental commissions. The landlord representative will have an expert listing agent helping them so it would be a good idea for you to have one as well.
Personally see all the spaces that meet your needs 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 about 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 properties you believe is suitable for your needs: continue searching until you have at least two to 3 alternative options. 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 landlords competing for your tenancy. They also give you something to fall back to whether the negotiations to your first choice fall through.
Send out proposals to your top three to five options. These are not legally binding. You never need to have a landlord representative’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 every property. Some of the things you should put into consideration include the size of this distance,the asking base rental rates,the required 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 over your budget. The monthly base rent is calculated by multiplying the commercial space square feet from the asking base rate plus any operating expenses then dividing by 12.
If any of the commercial buildings need tenant finish-outs then it is critical that you figure out what changes you want on each and get bids from contractors. This way if the landlord is offering a tenant improvement allowance you will know just how much out of pocket you will need to pay over 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 every 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’s time to have the landlord offer you the first draft of this commercial lease contract.
Now it’s time to review the commercial lease 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 as well. Commercial lease language can be negotiated. If you do not like certain lease items or would like to propose new language today is the time to do so.
Once the end of lease contract negotiations has finished the building owner will give you a copy of the lease to sign.
There are several more things to consider when leasing commercial space however these ideas will help get you started. If you’re a new business leasing commercial property for the first time or an existing business who has only leased 1 or two 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.