Before you start looking for an excellent warehouse space for rent for your startup,you must to get informed about the commercial space leasing process. Being ready will help prevent you from making hurried decisions and costly mistakes thatyou will come to regret later on. The following are some insider suggestions to help make an informed decision when letting a commercial property your company
Initiate the process of hunting for commercial space at least 6-12 months before your existing lease expires or until your perfect move-in-date. Finding the perfect space and negotiating the deal alonewill 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 improvements that 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 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 do not be afraid to ask them to get more information.
If you’re not knowledgeable about the commercial real estate leasing process or the current market conditions then consider engaging the assistance of a tenant rep. Their services do not cost you anything since building owners compensate all of the leasing fees. The landlord rep will have an experienced listing agent representing them so it would be a good idea for you to have one too.
Personally visit all of the properties 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 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 improvement allowances,etc..
Don’t settle for the first commercial space you think is acceptable for your needs: continue looking until you have at least two to 3 other options. These additional options will work to your advantage because you will know what to expect throughout the lease negotiations and you’ll gain more leverage with multiple building owners competing for your business. They also give you something to fall back to whether the negotiations to your first choice fall through.
Send out proposals to your top three to five options. These are not legally binding. You don’t ever need 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 business,prepare a spreadsheet to do an apples to apples comparison of every property. Some of the things you need to put into consideration include the dimensions of the space,the asking foundation rental rates,the required lease term,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 simply calculating the monthly base rents for each property then removing those which are way above your budget. The monthly base rent is calculated by multiplying the commercial space square feet by the asking base rate plus any operating expenditures then dividing by 12.
If any of the commercial spaces require tenant improvements then it is important that you figure out what changes you want on each and get prelim construction bids. That way if the landlord is offering a construction allowance you will learn how much out of pocket you’ll need to pay above and beyond what the landlord is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to go back to every landlord to negotiate extra concessions. Make sure you completely 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 result in you signing a contract thatyour business can’t live up to.
After negotiations are finalized and you have 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 wise for you to hire an attorney to review the lease. For those who have a tenant agent then they can review the lease with you also. Industrial lease language can be negotiated. If you do not like particular lease items or would like to propose new language today 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 sign.
There are several more things to consider when leasing commercial space however these ideas will help get you going. If you’re a new business leasing space for the first time or an existing business who has just rented one or two spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you’ll save a great deal of money and time.