Best Techniques For Negotiating Industrial Warehouse Properties For Rent

Before you begin searching for an excellent warehouse space for your company, you should to get informed about the commercial space leasing process. Being ready should keep you from making rash decisions and costly mistakes thatyou will come to regret in the future. Below are some insider tips to help make an informed choice when leasing a commercial space your business

Initiate the process of hunting commercial space at least 6-12 months before your existing lease expires or before your ideal move-in-date. Finding the correct space and negotiating the deal alonewill require 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 that the time required will depend on the scope of work.

Thoroughly examine 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 are in doubt about what they mean don’t be afraid to ask them to get more info.

If you are not familiar with the commercial rental process or the current market conditions then consider engaging the support of a tenant agent. Their services don’t cost you anything because building owners compensate all of the rental commissions. The landlord representative will have an knowledgable listing agent representing them so it would be a good idea for you to have one also.

Personally see all of the properties 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 representatives a lot of questions about who owns the property, property amenities, required lease duration, 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 needs: continue looking until you have at least 2 to three alternative choices. These additional options will work to your advantage because you will know what to expect throughout the lease negotiations and you’ll gain more leverage with numerous building owners competing for your tenancy. 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 choices. These aren’t legally binding. You never 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 each property. Some of the things you should put into consideration include the dimensions of this space, the inquiring base rental rates, the necessary lease term, and the incremental costs (taxes, insurance, maintenance, etc). You can also 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 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 and any operating expenses then dividing by 12.

If any of the commercial buildings require tenant finish-outs then it’s important that you figure out what improvements you want on each and get construction bids. That way if the landlord is offering a tenant improvement allowance you will learn just how much out of pocket you’ll need to pay above and beyond what the landlord is willing to give.

Carefully analyze and compare the terms of each proposal. Consider whether it makes sense to return to each landlord to negotiate additional concessions. Make certain 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 cannot live up to.

After negotiations are finalized and you have 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. If you have a tenant representative then they could review the lease with you as well. Industrial lease language could be negotiated. If you don’t like certain lease items or would like to propose new language today is the time to do so.

Once the end of rental contract negotiations has ended the landlord will give you a draft of the lease to review.

There are many more things to think about when leasing commercial property however these suggestions 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 rented 1 or 2 spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you’ll save a great deal of time and money.