Before you begin searching for an excellent warehouse space for rent for your company, you will need to get informed about the commercial space leasing procedure. Being prepared will keep you from making rash decisions and costly mistakes you will regret in the future. The following are some insider suggestions to help make an informed choice when leasing a commercial property your business
Start the process of finding commercial space at least 6-12 months before your existing lease terminates or before your perfect move-in-date. Finding the correct space and negotiating the deal alonewill take 1-2 months depending on the size area and current market conditions. Typically the spaces you like will require some type of tenant improvements which the time required will depend on the scope of work.
Thoroughly research your company’s present and future needs. Consult with the different department heads for input as well as some key employees.
Get acquainted with the commercial real estate terms and definitions. Various landlords state and quote things differently. If you are in doubt about what they mean don’t be afraid to ask them to get more information.
If you are not familiar with the commercial rental process or the present market conditions then consider engaging the support of a tenant agent. Their services don’t cost you anything because building owners pay all of the rental fees. The landlord rep will have an experienced listing agent helping them so it would be a great idea for you to have one also.
Physically visit all of the spaces that meet your needs so you can make a brief list. Bear in mind that the designs 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 term length, how much the landlord is willing to give in tenant construction allowances, etc..
Do not settle for the first commercial properties you think is suitable for your needs: continue looking until you have at least two to three alternative choices. These extra options will work to your benefit because you will know what to expect during 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 for your first choice go sideways.
Send out proposals to your top three to five choices. These are not legally binding. You don’t ever need to have a landlord representative’s verbal note. Everything should be in writing.
To help you decide what property is most suitable for your company, prepare a spreadsheet to do an apples to apples comparison of each property. A few of the things you should consider include the dimensions of the distance, the inquiring base rental rates, the required lease duration, and the incremental expenses (taxes, insurance, maintenance, etc). You can also take note about the pros and cons of each property. If you are budget conscious then you can quickly narrow down the list by simply calculating the monthly base rents for each property then removing those which are way over your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate plus any operating expenses then dividing by 12.
If some of the commercial spaces require tenant improvements then it is important that you figure out 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 will have to pay over and beyond what the landlord is willing to give.
Carefully examine and compare the terms of each proposal. Consider whether it is logical to go back to each landlord to negotiate additional concessions. Make sure you completely understand the total expenses you are expected to cover. Do not get emotionally attached to a specific property until the negotiations are over. Emotional attachment might lead to you signing a contract your business cannot live up to.
After negotiations are finalized and you have made your selection now it’s time to have the landlord provide you the first draft of the commercial lease contract.
Now it’s time to review the commercial lease contract. It would be wise 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 would like to propose new language today is the time to do so.
Once the end of lease contract negotiations has finished the landlord will supply you a draft of the lease to review.
There are several more things to consider when leasing commercial property however these suggestions will help get you going. If you are a new company leasing commercial space for the first time or an existing company who has just leased one or two spaces then consider getting help from a tenant rep. Their services do not cost you anything and you will save a lot of time and money.