Before you begin searching for a great warehouse space for rent for your company, you must to get informed about the commercial property leasing process. Being ready should help prevent you from making impulsive decisions and costly mistakes thatyou will come to regret later on. Below are some insider tips to help make an informed choice when leasing a commercial space your company
Start the process of hunting for commercial space at least 6-12 months before your current lease expires or until your ideal move-in-date. Finding the right space and negotiating the deal alonewill take 1-2 months depending upon the size area and current market conditions. Typically the spaces you like will require some type of changes that the time required will depend on the scope of work.
completely 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 definitions. Various landlords say and quote things differently. If you’re unsure about what they mean do not be afraid to ask them to get more info.
If you’re 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 landlords compensate all of the rental fees. The landlord agent will have an knowledgable listing agent advising them so it would be a great idea for you to have one as well.
Personally tour all of the spaces that meet your requirements so thatyou can make a short list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord agents a great deal of questions regarding who owns the property, property amenities, required lease term length, how much the landlord is prepared to give in tenant construction allowances, etc..
Don’t settle for the first commercial properties you believe is suitable for your requirements: continue searching until you have at least two to three other choices. These additional options will work to your benefit since you will know what to expect throughout the lease negotiations and you will gain more leverage with multiple landlords competing for your tenancy. They also give you something to fall back to if the discussions to your first choice go silent.
Send out proposals to your top three to five choices. 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 best suited for your company, 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 base rental rates, the required lease duration, 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 eliminating those that 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 property require reconfiguring then it is important that you determine what improvements you want on each and get construction bids. This way if the building owner is offering a construction allowance you will know just how much out of pocket you will have to pay over and beyond what the building owner is prepared 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. Be certain you fully understand the total expenses you’re expected to cover. Don’t get emotionally attached to a specific property until the discussions are over. Emotional attachment might result in you signing a contract thatyour business cannot live up to.
After discussions are finalized and you’ve 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. If you have a tenant representative 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.
Once the end of lease contract negotiations has finished the building owner will provide you a draft of the lease to sign.
There are many more things to consider when leasing commercial space however these ideas will help get you going. If you’re a new company leasing commercial space for the first time or an current company who has only rented one or two spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you will save a lot of time and money.