Before you begin searching for an excellent warehouse space for rent for your startup, you should to get informed about the commercial space leasing procedure. Being ready will keep you from making expeditious decisions and costly mistakes you will probably regret later on. The following are some insider suggestions to help make an informed choice 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 before your ideal move-in-date. Finding the right space and negotiating the deal will require 1-2 months depending upon the size space and current market conditions. Typically the spaces you like will need some type of improvements that the time needed 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 the commercial property terms and meanings. Various landlords say and quote things differently. If you are in doubt about what they mean do not be afraid to ask them to provide more info.
If you are not knowledgeable about the commercial property leasing process or the current market conditions then consider engaging the assistance of a tenant agent. Their services do not cost you anything since building owners compensate all the rental commissions. The landlord representative will have an professional listing agent helping them so it would be a good idea for you to have one too.
Physically tour all the spaces that meet your requirements so you can make a brief list. Keep in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord reps a lot of questions about the ownership, property amenities, required lease term length, how much the landlord is willing to give in tenant improvement allowances, etc..
Do not settle for the first commercial space you believe is suitable for your requirements: continue searching until you have at least 2 to 3 other options. These extra options will work to your advantage since you will know what to expect throughout the lease negotiations and you will gain more leverage with numerous building owners competing for your business. They also give you something to fall back to if the discussions for your first choice go sideways.
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 word. Everything should be in writing.
To help you decide what property is most suitable for your company, prepare a spreadsheet to do an apples to apples comparison of every property. Some of the things you should consider include the size of this distance, the asking foundation rental rates, the required 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 are budget conscious then you can quickly narrow down the list by simply calculating the monthly base rents for each property then eliminating those that are way over your budget. The monthly base rent is calculated by multiplying the commercial space square feet from the asking base rate plus any operating expenditures then dividing by 12.
If some of the commercial property need reconfiguring then it is important that you figure out what improvements you want on each and get construction bids. That way if the landlord is offering a finish out allowance you will learn just how much out of pocket you will need to pay over and beyond what the landlord is willing to give.
Carefully analyze 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. Do not get emotionally attached to a specific property until the discussions are over. Emotional attachment might result in you signing a contract your business can’t 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 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. If you have a tenant representative then they could review the lease with you also. Industrial lease language could be negotiated. If you do not like certain lease items or want to propose new language today is the time to do so.
When the end of lease contract negotiations has ended the landlord will provide you a copy of the lease to review.
There are several more things to consider when renting commercial real estate however these suggestions will help get you started. If you are a new company renting space for the first time or an current company who has just leased one or 2 spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you will save a lot of time and money.