Renting Warehouse Properties For Startups
Before you start looking for a good warehouse space for rent for your company,you must to get educated about the commercial space leasing procedure. Being ready should prevent you from making expeditious decisions and costly mistakes you will probably regret later on. The following are some insider suggestions to help make an informed choice when leasing a commercial property your business
Initiate the process of locating commercial space at least 6-12 months before your existing lease expires or until your ideal move-in-date. Finding the correct 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 sort of tenant improvements which the time needed will depend on the scope of work.
completely research your business’s current and future needs. Consult with the different department heads for input as well as some key employees.
Get acquainted with the commercial property terms and meanings. Different landlords state and quote things otherwise. If you’re unsure about what they mean don’t be afraid to ask them to supply more info.
If you’re not familiar with the commercial real estate leasing process or the current market conditions then consider engaging the help of a tenant representative. Their services don’t cost anything since landlords pay all the rental fees. The landlord representative will have an expert listing agent helping them so it would be a great idea for you to have one also.
Physically visit all the spaces that meet your requirements so you can make a brief list. Keep in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord reps a great deal of questions regarding the ownership,property amenities,required lease duration,how much the landlord is willing to give in tenant improvement allowances,etc..
Do not settle for the first commercial space you believe is suitable 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’ll gain more leverage with multiple landlords competing for your tenancy. They also give you something to fall back to whether the discussions to your first choice go silent.
Send out proposals to your top three to five choices. These are not legally binding. You never need to have a landlord representative’s verbal note. Everything needs to 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. Some of the things you need to consider include the dimensions of the space,the inquiring foundation rental rates,the necessary lease duration,and the incremental costs (taxes,insurance,maintenance,etc). You can also take note about the advantages and disadvantages 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 that 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 expenditures then dividing by 12.
If some of the commercial properties require finish out then it’s important that you figure out what changes you want on each and get preliminary bids. This way if the landlord is offering a finish out allowance you will learn how much out of pocket you’ll have to pay over and beyond what the landlord is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it makes sense to return to each landlord to negotiate extra concessions. Be sure you completely understand the total expenses you’re expected to cover. Do not get emotionally attached to a certain property until the discussions are over. Emotional attachment might result in you signing a contract your business cannot 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 the commercial rental contract.
Now it’s time to reassess the commercial rental contract. It would be advisable for you to hire an attorney to review the lease. For those who have a tenant representative then they could review the lease with you also. Commercial lease language could be negotiated. If you don’t like particular lease items or want to propose new language today is the time to do so.
When the end of rental contract negotiations has finished the landlord will provide you a copy of the lease to review and sign.
There are several more things to think about when leasing commercial real estate however these suggestions will help get you going. If you’re a new business leasing commercial space for the first time or an existing business who has only rented one or 2 spaces then consider getting help from a tenant representative. Their services do not cost you anything and you’ll save a great deal of money and time.