Before you start searching for a good warehouse space for rent for your small business, you need to get informed about the commercial property leasing process. Being ready should help prevent you from making hurried decisions and costly mistakes thatyou will probably regret in the future. The following are some insider tips to help make an informed choice when leasing a commercial real estate your company
Initiate the process of finding commercial real estate for lease at least 6-12 months before your existing lease terminates or before your perfect move-in-date. Locating the right space and negotiating the deal alonewill take 1-2 months depending on the size area and current market conditions. In most cases the spaces you like will need some sort of changes which the time needed will depend on the scope of work.
completely research your company’s present and future needs. Consult with the different department heads for input in addition to some key employees.
Get acquainted with the commercial space terms and definitions. Different landlords state 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 familiar with the commercial rental process or the present market conditions then consider engaging the support of a tenant agent. Their services do not cost anything since landlords compensate all of the leasing fees. The landlord rep will have an professional listing agent helping them so it would be a good idea for you to have one also.
Physically tour all of the spaces that meet your requirements so thatyou 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 regarding 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 think is suitable for your requirements: continue searching until you have at least two to three alternative 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 numerous landlords competing for your business. They also give you something to fall back to if the discussions for your first choice go silent.
Send out proposals to your top three to five choices. These aren’t legally binding. You never need to have 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 each property. A few of the things you should put into consideration include the dimensions of this space, the asking foundation rental rates, the necessary lease term, and the incremental costs (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 simply calculating the monthly base rents for each property then removing 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 and any operating expenses then dividing by 12.
If some of the commercial spaces need tenant improvements then it is important that you figure out what improvements you want on each and get preliminary bids. This way if the landlord is offering a tenant improvement allowance you will know 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 makes sense to go back to each landlord to negotiate extra concessions. Be certain you fully understand the total expenses you are expected to cover. Do not get emotionally attached to a certain property until the discussions are over. Emotional attachment might result in you signing a contract thatyour business can’t 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 this commercial rental contract.
Now it’s time to reassess the commercial rental 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. Commercial lease language could be negotiated. If you do not like particular lease items or would like to propose new language now is the time to do so.
Once the end of rental contract negotiations has finished the landlord will provide you a draft of the lease to review and sign.
There are several more things to consider when renting commercial property however these suggestions will help get you started. If you are a new company renting commercial space for the first time or an existing company who has just rented 1 or two spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you will save a lot of money and time.