Recommendations For Obtaining The Very Best Price When Hunting For Warehouse Space To Rent
Before you start searching for the perfect warehouse space for your business, you need to get educated about the commercial real estate leasing procedure. Being prepared will prevent you from making foolish decisions and costly mistakes thatyou will end up regretting in the future. Below are some insider suggestions to help make an informed choice when leasing a commercial real estate your company
Initiate the process of searching commercial space at least 6-12 months before your existing lease expires or before your ideal move-in-date. Finding the right space and negotiating the deal will take 1-2 months depending on the size area and current market conditions. In most cases the spaces you like will require some type of improvements which the time needed will depend on the scope of work.
Thoroughly research your business’s current and future needs. Consult with the various department heads for input in addition to some key employees.
Get acquainted with allthe commercial real estate terms and definitions. Different landlords state and quote things otherwise. If you are in doubt about what they mean don’t be afraid to ask them to supply more info.
If you are not familiar with the commercial leasing process or the current market conditions then consider engaging the support of a tenant agent. Their services don’t cost you anything because landlords compensate all of the leasing fees. The landlord rep will have an knowledgable listing agent advising them so it would be a great idea for you to have one as well.
Personally see all of the spaces that meet your requirements so thatyou can make a brief list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord reps a lot of questions about who owns the property, property amenities, required lease duration, how much the landlord is prepared to give in tenant improvement allowances, etc..
Don’t settle for the first commercial space you think is acceptable for your requirements: continue looking until you have at least two to 3 alternative choices. These extra options will work to your advantage because you will know what to expect throughout the lease negotiations and you will gain more leverage with multiple landlords competing for your business. They also give you something to fall back to whether the negotiations to your first choice go sideways.
Send out proposals to your top three to five choices. These are not legally binding. You never want 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 put into consideration include the size of this distance, the asking base rental rates, the required lease term, and the incremental expenses (taxes, insurance, maintenance, etc). You can also 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 by the asking base rate and any operating expenditures then dividing by 12.
If any of the commercial properties require tenant improvements then it is essential that you determine what improvements you want on each and get bids from contractors. This way if the landlord is offering a tenant improvement allowance you will learn just how much out of pocket you will have to pay above and beyond what the landlord 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 additional concessions. Make certain you fully understand the total expenses you are expected to cover. Don’t get emotionally attached to a certain property until the negotiations are over. Emotional attachment might lead to 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 provide you the first draft of this commercial lease contract.
Now it’s time to review 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 also. Industrial lease language could be negotiated. If you don’t like particular 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 landlord will give you a draft of the lease to review and sign.
There are many more things to think about when leasing commercial real estate however these ideas will help get you started. If you are a new business leasing commercial property for the first time or an existing business who has just leased 1 or two spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you will save a great deal of money and time.