The Correct Way To Lease Warehouse Real Estate

Before you start looking for an excellent warehouse space for your startup, you should to get educated about the commercial real estate leasing process. Being ready should help prevent you from making rapid decisions and costly mistakes thatyou will probably regret in the future. Below are some insider suggestions to help make an informed decision when renting a commercial space your business

Initiate the process of hunting commercial space at least 6-12 months before your current lease expires or until your ideal move-in-date. Finding the correct space and negotiating the deal will require 1-2 months depending on the size area and current market conditions. In most cases the spaces you like will require some sort of improvements which the time needed will depend on the scope of work.

completely 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 definitions. Various landlords say and quote things otherwise. If you’re in doubt about what they mean don’t be afraid to ask them to supply more info.

If you’re not knowledgeable about the commercial property leasing process or the current market conditions then consider engaging the assistance of a tenant agent. Their services don’t cost you anything because building owners pay all the leasing fees. The landlord agent will have an expert listing agent advising them so it would be a good idea for you to have one too.

Personally visit all the spaces that meet your needs so thatyou can make a short list. Keep in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord representatives a great deal of questions regarding who owns the property, property amenities, required lease duration, how much the landlord is prepared to give in tenant improvement allowances, etc..

Do not settle for the first commercial space you think is acceptable for your needs: continue looking until you have at least 2 to three other choices. These additional options will work to your benefit because you will know what to expect throughout the lease negotiations and you’ll gain more leverage with numerous building owners competing for your tenancy. They also give you something to fall back to if the discussions for your first choice fall through.

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

To help you decide what property is most suitable for your business, prepare a spreadsheet to do an apples to apples comparison of every property. Some of the things you should consider include the size of the space, the inquiring base rental rates, the required lease duration, 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’re budget conscious then you can quickly narrow down the list by simply calculating the monthly base rents for each property then removing those that are way over your budget. The monthly base rent is calculated by multiplying the commercial space square feet by the asking base rate and any operating expenditures then dividing by 12.

If any of the commercial spaces require tenant finish-outs then it is crucial that you determine what improvements 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’ll have to pay over and beyond what the landlord is prepared to give.

Carefully analyze and compare the terms of each proposal. Consider whether it makes sense to return to every landlord to negotiate extra concessions. Be certain you fully understand the total expenses you’re expected to cover. Do not get emotionally attached to a specific property until the discussions are over. Emotional attachment might lead to you signing a contract thatyour business cannot live up to.

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

Now it’s 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. Commercial lease language can be negotiated. If you don’t like particular lease items or want to propose new language now is the time to do so.

When the end of rental contract negotiations has finished the landlord will give you a draft of the lease to review and sign.

There are many more things to think about when renting commercial space however these suggestions will help get you going. If you’re a new business renting commercial space for the first time or an current business who has only 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 time and money.