Before you begin looking for an excellent warehouse space for rent for your startup, you need to get informed about the commercial property leasing procedure. Being prepared should prevent you from making foolish decisions and costly mistakes thatyou will probably regret later on. The following are some insider tips to help make an informed decision when renting a commercial space your company
Start the process of finding commercial space for lease at least 6-12 months before your current lease terminates or before your ideal move-in-date. Finding the right space and negotiating the deal alonewill require 1-2 months depending on the size area and current market conditions. Typically the spaces you like will need some type of changes which the time needed will depend on the scope of work.
completely analyze your company’s present and future needs. Consult with the different department heads for input in addition to some key employees.
Get familiar with the commercial property terms and meanings. Various landlords say and quote things otherwise. If you are in doubt about what they mean do not be afraid to ask them to supply more info.
If you are not familiar with the commercial real estate leasing process or the present market conditions then consider engaging the support of a tenant rep. Their services do not cost you anything because building owners compensate all of the leasing commissions. The landlord rep will have an knowledgable listing agent helping them so it would be a good idea for you to have one too.
Physically see all of the properties that meet your requirements 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 agents a lot 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 requirements: continue searching until you have at least 2 to 3 other options. These additional options will work to your benefit since you will know what to expect throughout the lease negotiations and you’ll gain more leverage with multiple building owners competing for your company. They also give you something to fall back to if the negotiations to your first choice go silent.
Send out proposals to your top three to five options. These are not legally binding. You don’t ever need to take a landlord representative’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 every property. A few of the things you need to consider include the size of the space, the asking foundation rental rates, the required lease duration, and the incremental expenses (taxes, insurance, maintenance, etc). It is also possible to take note about the advantages and disadvantages 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 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 properties need tenant improvements then it is essential that you determine what improvements you want on each and get bids from contractors. That way if the landlord is offering a tenant improvement allowance you will learn how much out of pocket you’ll have to pay above and beyond what the landlord is prepared to give.
Carefully examine and compare the terms of each proposal. Consider whether it makes sense to go back to every landlord to negotiate extra concessions. Be sure you completely 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 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 is time to have the landlord offer you the first draft of the 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 agent then they could review the lease with you as well. 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 finished the building owner will supply you a copy of the lease to review and sign.
There are many more things to consider when renting commercial space however these suggestions will help get you started. If you are a new business renting commercial property for the first time or an current business who has just leased one or 2 spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you’ll save a lot of money and time.