Ideal Tips For Searching For Industrial Properties For Lease
Before you begin searching for an excellent warehouse space for rent for your small business, you will need to get informed about the commercial space leasing process. Being prepared should help prevent you from making hurried decisions and costly mistakes thatyou will regret later on. Below are some insider tips to help make an informed decision when renting a commercial real estate your business
Initiate the process of locating commercial warehouse space at least 6-12 months before your existing lease terminates or before your ideal move-in-date. Locating the perfect space and negotiating the deal will take 1-2 months depending on the size space and current market conditions. Typically the spaces you like will require some sort of tenant improvements which the time needed will depend on the scope of work.
completely examine your company’s present and future needs. Consult with the various department heads for input in addition to some key employees.
Get acquainted with the commercial real estate terms and definitions. Various landlords say and quote things differently. If you’re unsure about what they mean don’t be afraid to ask them to provide more information.
If you’re not familiar with the commercial leasing process or the present market conditions then consider engaging the assistance of a tenant rep. Their services don’t cost anything since building owners compensate all of the rental fees. The landlord representative will have an expert listing agent helping them so it would be a good idea for you to have one too.
Personally tour all of the properties that meet your needs so thatyou 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 about the ownership, property amenities, required lease term length, how much the landlord is willing to give in tenant improvement allowances, etc..
Don’t settle for the first commercial properties you think is acceptable for your needs: continue searching until you have at least 2 to 3 alternative options. These extra options will work to your advantage since you will know what to expect during the lease negotiations and you’ll gain more leverage with numerous building owners competing for your business. They also give you something to fall back to whether the discussions to your first choice go silent.
Send out proposals to your top three to five options. These aren’t legally binding. You never want to take a landlord agent’s verbal word. Everything should 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 need to put into consideration include the size of the space, the inquiring base rental rates, the required lease duration, and the incremental costs (taxes, insurance, maintenance, etc). You can also take note about the advantages and disadvantages of each property. If you’re budget conscious then you can quickly narrow down the list by 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 and any operating expenses then dividing by 12.
If any of the commercial buildings require tenant finish-outs then it is essential that you figure out what improvements you want on each and get construction bids. This way if the landlord is offering a tenant improvement allowance you will learn just how much out of pocket you’ll need 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 return to each landlord to negotiate additional concessions. Make certain you fully understand the total expenses you’re expected to cover. Don’t 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 is time to have the landlord provide you the first draft of the commercial lease contract.
Now it is time to reassess the commercial lease contract. It would be advisable for you to hire an attorney to review the lease. For those who have a tenant representative then they can review the lease with you also. Commercial lease language can be negotiated. If you don’t like certain lease items or would like to propose new language now is the time to do so.
Once the end of lease contract negotiations has ended the landlord will supply you a copy of the lease to review and sign.
There are many more things to think about when renting commercial real estate however these tips will help get you going. If you’re a new business renting commercial space for the first time or an existing business who has just leased 1 or 2 spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you’ll save a lot of money and time.