Before you begin searching for a good warehouse space for rent for your business, you will need to get informed about the commercial space leasing procedure. Being prepared should help prevent you from making hasty decisions and costly mistakes thatyou will regret in the future. The following are some insider suggestions to help make an informed decision when renting a commercial real estate your company
Start the process of hunting for commercial space for lease at least 6-12 months before your existing lease terminates or until your perfect move-in-date. Finding the perfect space and negotiating the deal will take 1-2 months depending upon the size space and current market conditions. In most cases the spaces you like will require some sort of tenant improvements that the time needed will depend on the scope of work.
completely analyze your company’s current and future needs. Consult with the different department heads for input in addition to some key employees.
Get acquainted with allthe commercial property terms and definitions. Different landlords state and quote things otherwise. If you are in doubt about what they mean don’t be afraid to ask them to get more info.
If you are not familiar with the commercial rental process or the current market conditions then consider engaging the support of a tenant agent. Their services don’t cost you anything since landlords compensate all the leasing fees. The landlord agent will have an expert listing agent advising them so it would be a great idea for you to have one also.
Personally tour 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 the ownership, property amenities, required lease term length, how much the landlord is prepared to give in tenant construction allowances, etc..
Do not settle for the first commercial space you believe is suitable for your needs: continue looking until you have at least 2 to three other choices. These additional options will work to your benefit since you will know what to expect during the lease negotiations and you will gain more leverage with numerous landlords competing for your business. They also give you something to fall back to if the negotiations to your first choice fall through.
Send out proposals to your top three to five choices. These aren’t legally binding. You don’t ever want to have a landlord representative’s verbal note. 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 each property. A few of the things you should consider include the dimensions of this distance, the asking base rental rates, the required lease duration, and the incremental costs (taxes, insurance, maintenance, etc). It is also possible to take note about the pros and cons 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 which 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 improvements then it is important that you determine what changes you want on each and get construction bids. This way if the building owner is offering a tenant improvement allowance you will learn how much out of pocket you will need to pay over and beyond what the building owner 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 additional concessions. Be certain you fully understand the total expenses you are expected to cover. Do not get emotionally attached to a certain property until the negotiations are over. Emotional attachment might lead to you signing a contract thatyour 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 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. For those who have a tenant agent then they could review the lease with you also. Industrial lease language could be negotiated. If you don’t 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 draft of the lease to review.
There are many more things to consider when leasing commercial property however these tips will help get you started. If you are a new company leasing commercial property for the first time or an existing company who has just leased one or 2 spaces then consider getting help from a tenant agent. Their services do not cost you anything and you will save a lot of time and money.
