Finest Techniques For Negotiating Warehouse Property For Rent
Before you start searching for an excellent warehouse space for rent for your small business,you need to get informed about the commercial warehouse leasing process. Being prepared should prevent you from making rash decisions and costly mistakes you will end up regretting later on. The following are some insider tips to help make an informed decision when letting a commercial warehouse space your business
Start the process of locating commercial space at least 6-12 months before your existing lease terminates or before your perfect move-in-date. Locating the correct 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 need some sort of changes that the time required will depend on the scope of work.
Thoroughly analyze your business’s current and future needs. Consult with the different department heads for input in addition to some key employees.
Get familiar with the commercial space terms and meanings. Various landlords state and quote things differently. If you are unsure about what they mean don’t be afraid to ask them to supply more information.
If you are not knowledgeable about the commercial leasing process or the current market conditions then consider engaging the assistance of a tenant agent. Their services don’t cost anything since building owners compensate all of the leasing commissions. The landlord rep will have an professional listing agent representing them so it would be a great idea for you to have one also.
Physically see all of the properties that meet your requirements so you can make a brief 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 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 space you think is acceptable for your requirements: continue searching until you have at least two to three other 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 tenancy. They also give you something to fall back to if the discussions to your first choice fall through.
Send out proposals to your top three to five options. These aren’t legally binding. You don’t ever want to take a landlord agent’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 every property. A few of the things you need to consider include the dimensions of the space,the inquiring foundation 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 removing those that are way above your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate plus any operating expenditures then dividing by 12.
If any of the commercial spaces need reconfiguring then it is important that you figure out what improvements you want on each and get prelim construction bids. That way if the landlord is offering a finish out allowance you will know how much out of pocket you’ll have to pay above 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 every landlord to negotiate extra concessions. Make sure you completely understand the total expenses you are expected to cover. Don’t get emotionally attached to a certain property until the discussions are over. Emotional attachment might result in you signing a contract your business cannot live up to.
After discussions are finalized and you have made your selection now it’s time to have the landlord offer you the first draft of the commercial lease contract.
Now it’s 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 could review the lease with you as well. Industrial lease language could be negotiated. If you don’t like certain lease items or want to propose new language now is the time to do so.
When the end of lease contract negotiations has ended the landlord will give you a draft of the lease to review and sign.
There are several more things to think about when renting commercial property however these tips will help get you going. If you are a new company renting space for the first time or an existing company who has only rented 1 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 time and money.