Before you begin searching for an excellent warehouse space for rent for your company, you need to get informed about the commercial space leasing process. Being ready should keep you from making hurried decisions and costly mistakes you will come to regret in the future. Below are some insider tips to help make an informed decision when leasing a commercial space your company
Initiate the process of searching 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 space and current market conditions. In most cases the spaces you like will need some sort of improvements which the time required will depend on the scope of work.
Thoroughly research your business’s current and future needs. Consult with the different department heads for input in addition to some key employees.
Get familiar with allthe commercial property terms and meanings. Different landlords state and quote things differently. If you’re unsure about what they mean do not be afraid to ask them to get more information.
If you’re not knowledgeable about the commercial leasing process or the current market conditions then consider engaging the help of a tenant agent. Their services do not cost you anything since landlords compensate all of the rental fees. The landlord agent will have an knowledgable listing agent advising them so it would be a great idea for you to have one too.
Physically see all of the spaces that meet your needs so you can make a short list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord agents a lot of questions about who owns the property, property amenities, required lease term length, how much the landlord is prepared to give in tenant construction allowances, etc..
Don’t settle for the first commercial properties you believe is acceptable for your needs: continue looking until you have at least two to 3 alternative options. These extra options will work to your benefit because you will know what to expect during 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 if the negotiations for your first choice go sideways.
Send out proposals to your top three to five options. These are not legally binding. You never want to have a landlord agent’s verbal note. Everything should 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 each property. A few of the things you need to consider include the dimensions of the space, the asking foundation 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’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 industrial space square feet by the asking base rate plus any operating expenditures then dividing by 12.
If some of the commercial properties need tenant improvements then it is critical that you figure out what improvements you want on each and get preliminary bids. This way if the landlord is offering a tenant improvement allowance you will know how much out of pocket you’ll need to pay over and beyond what the landlord is prepared to give.
Carefully examine and compare the terms of each proposal. Consider whether it is logical to go back to each landlord to negotiate extra concessions. Be certain you fully understand the total expenses you’re expected to cover. Don’t get emotionally attached to a certain property until the negotiations are over. Emotional attachment might lead to you signing a contract your business can’t live up to.
After negotiations are finalized and you’ve 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 reassess the commercial lease contract. It would be wise for you to hire an attorney to review the lease. If you have a tenant agent then they could review the lease with you also. Commercial lease language could be negotiated. If you do not like particular lease items or want to propose new language today is the time to do so.
When the end of lease contract negotiations has finished the building owner will provide you a copy of the lease to sign.
There are several more things to think about when renting commercial property however these ideas will help get you going. If you’re a new company renting space for the first time or an current company who has only leased 1 or two spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you’ll save a lot of time and money.