How you can Rent Industrial Space
Before you start looking for an excellent commercial property rental for lease for your startup company,you must to get informed about the commercial space leasing procedure. Being ready should help prevent you from making rash decisions and costly mistakes thatyou will regret in the future. Below are some insider suggestions to help make an informed choice when renting a commercial property your company
Initiate the process of searching commercial space at least 6-12 months before your existing lease expires or before your perfect move-in-date. Finding the correct space and negotiating the deal will take 1-2 months depending on the size space and current market conditions. Typically the spaces you like will require some type of improvements that the time needed will depend on the scope of work.
Thoroughly research your company’s current and future needs. Consult with the various department heads for input in addition to some key employees.
Get familiar with allthe commercial real estate terms and definitions. 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 familiar with the commercial leasing process or the current market conditions then consider engaging the help of a tenant rep. Their services do not cost anything because landlords pay all of the rental commissions. The landlord agent will have an knowledgable listing agent helping them so it would be a good idea for you to have one as well.
Personally see all of the spaces that meet your needs so thatyou can make a short list. Keep in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord agents a great deal of questions about the ownership,property amenities,required lease duration,how much the landlord is prepared to give in tenant construction allowances,etc..
Do not settle for the first commercial space you think is acceptable for your needs: 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 multiple 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 options. These are not legally binding. You don’t ever need to have a landlord representative’s verbal word. Everything needs to 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 consider include the size of this distance,the inquiring base rental rates,the required lease duration,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 removing those which are way above your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate plus any operating expenditures then dividing by 12.
If any of the commercial properties require tenant improvements then it is crucial that you determine what changes you want on each and get preliminary bids. That way if the landlord is offering a tenant improvement allowance you will know 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 makes sense to go back to each 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 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 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 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 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 finished the landlord will provide you a copy of the lease to review.
There are many more things to think about when renting commercial real estate however these suggestions will help get you going. If you are a new company renting commercial space for the first time or an existing company who has only leased 1 or 2 spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you will save a great deal of time and money. For more warehouse space lease tips click here.