Before you start looking for a good warehouse space for rent for your startup,you should to get informed about the commercial space leasing procedure. Being ready will prevent you from making foolish decisions and costly mistakes you will come to regret later on. The following are some insider suggestions to help make an informed choice when letting a commercial property your business
Initiate the process of hunting commercial space at least 6-12 months before your existing lease expires or before your ideal move-in-date. Finding the right space and negotiating the deal alonewill require 1-2 months depending on the size space and current market conditions. Typically the spaces you like will need some type of improvements that the time required will depend on the scope of work.
completely research your company’s present and future needs. Consult with the various department heads for input as well as some key employees.
Get familiar with the commercial real estate terms and definitions. Different landlords state and quote things otherwise. If you are unsure about what they mean do not be afraid to ask them to supply more information.
If you are not knowledgeable about the commercial property leasing process or the present market conditions then consider engaging the support of a tenant rep. Their services do not cost you anything since building owners compensate all the rental fees. The landlord representative will have an expert listing agent representing them so it would be a good idea for you to have one too.
Physically see all the properties that meet your needs so you 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 great deal of questions about the ownership,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 properties you think is suitable for your needs: continue searching until you have at least two to three 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 company. They also give you something to fall back to if the negotiations to your first choice go silent.
Send out proposals to your top three to five choices. These aren’t legally binding. You never need to take a landlord representative’s verbal word. Everything needs to be in writing.
To help you decide what property is best suited for your company,prepare a spreadsheet to do an apples to apples comparison of every property. Some of the things you need to put into consideration include the dimensions of this distance,the asking base rental rates,the necessary lease term,and the incremental costs (taxes,insurance,maintenance,etc). You can also 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 that are way over your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate plus any operating expenditures then dividing by 12.
If some of the commercial spaces need tenant improvements then it’s 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 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 return to every landlord to negotiate extra concessions. Make sure you completely understand the total expenses you are 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 your business can’t live up to.
After negotiations are finalized and you have made your selection now it is time to have the landlord offer you the first draft of this commercial rental contract.
Now it is time to reassess the commercial rental contract. It would be wise for you to hire an attorney to review the lease. If you have a tenant agent 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 want to propose new language today is the time to do so.
When the end of rental contract negotiations has finished the building owner will give you a copy of the lease to review.
There are many more things to consider when leasing commercial space however these tips will help get you going. If you are a new company leasing commercial property for the first time or an existing company who has just rented one or two spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you will save a lot of time and money.