Before you start looking for the perfect warehouse space for rent for your small business,you must to get educated about the commercial space leasing process. Being ready should keep you from making rapid decisions and costly mistakes you will probably regret in the future. The following are some insider suggestions to help make an informed choice when letting a commercial property your business
Initiate the process of searching for commercial space at least 6-12 months before your existing lease expires or until your ideal move-in-date. Locating the right space and negotiating the deal will take 1-2 months depending upon the size area and current market conditions. In most cases the spaces you like will need some sort of improvements that the time required will depend on the scope of work.
Thoroughly examine your company’s current and future needs. Consult with the various department heads for input as well as some key employees.
Get acquainted with allthe commercial real estate terms and meanings. Different landlords say and quote things otherwise. If you are unsure about what they mean don’t be afraid to ask them to get more info.
If you are not familiar with the commercial property leasing process or the current market conditions then consider engaging the support of a tenant agent. Their services don’t cost anything because building owners compensate all the rental commissions. The landlord agent will have an professional listing agent advising them so it would be a great idea for you to have one also.
Personally tour all the properties that meet your needs so you can make a short list. Bear 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 construction allowances,etc..
Don’t settle for the first commercial space you believe is acceptable for your needs: continue searching until you have at least 2 to three other options. These extra 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 building owners competing for your business. They also give you something to fall back to whether the discussions to your first choice fall through.
Send out proposals to your top three to five options. These aren’t legally binding. You don’t ever want to have a landlord representative’s verbal word. 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. A few of the things you should put into consideration include the size of the distance,the asking base rental rates,the necessary lease term,and the incremental expenses (taxes,insurance,maintenance,etc). It is also possible to take note about the pros and cons 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 industrial space square feet from the asking base rate plus any operating expenses then dividing by 12.
If some of the commercial spaces need tenant improvements then it’s crucial that you determine what improvements you want on each and get bids from contractors. That way if the landlord is offering a tenant improvement allowance you will learn just how much out of pocket you’ll 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 makes sense to return to each landlord to negotiate additional concessions. Be certain you completely 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 your business cannot 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 the commercial lease contract.
Now it is 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 could review the lease with you also. Industrial lease language could be negotiated. If you don’t like certain lease items or would like to propose new language today is the time to do so.
When the end of lease contract negotiations has finished the landlord will supply you a draft of the lease to review and sign.
There are several more things to consider when renting commercial property however these suggestions will help get you started. If you are a new business renting commercial space for the first time or an existing business who has just rented 1 or 2 spaces then consider getting help from a tenant agent. Their services do not cost you anything and you’ll save a great deal of money and time.