Before you begin searching for an excellent for your small business, you should to get educated about the commercial warehouse leasing process. Being ready will keep you from making impulsive decisions and costly mistakes thatyou will probably regret later on. The following are some insider suggestions to help make an informed choice when letting a commercial real estate your business
Initiate the process of finding commercial space at least 6-12 months before your current lease terminates or until your ideal move-in-date. Finding the right 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 sort of modifications that the time needed will depend on the scope of work.
Thoroughly research your company’s current and future needs. Consult with the different department heads for input in addition to some key employees.
Get familiar with allthe commercial property terms and definitions. Different 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 information.
If you are not familiar with the commercial real estate leasing process or the current market conditions then consider engaging the support of a tenant agent. Their services do not cost anything because landlords compensate all the leasing fees. The landlord rep will have an expert listing agent representing them so it would be a good idea for you to have one also.
Personally tour all the spaces that meet your needs 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 representatives a great deal of questions regarding the ownership, property amenities, required lease duration, how much the landlord is willing to give in tenant construction allowances, etc..
Don’t settle for the first commercial properties you believe is suitable for your needs: continue looking until you have at least 2 to 3 other choices. These additional options will work to your advantage 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 negotiations for your first choice go sideways.
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 needs to be in writing.
To help you decide what property is most suitable for your business, prepare a spreadsheet to do an apples to apples comparison of every property. Some of the things you need to consider include the dimensions of this distance, the inquiring foundation rental rates, the necessary lease duration, and the incremental expenses (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 over your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate and any operating expenditures then dividing by 12.
If some of the commercial spaces require 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 learn just how much out of pocket you will have to pay over and beyond what the landlord is willing to give.
Carefully examine 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 completely understand the total expenses you are expected to cover. Don’t get emotionally attached to a specific property until the negotiations are over. Emotional attachment might result in you signing a contract thatyour business can’t live up to.
After negotiations are finalized and you have 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 wise for you to hire an attorney to review the lease. For those who have a tenant representative then they can review the lease with you as well. Industrial lease language can be negotiated. If you do not like particular lease items or would like to propose new language today is the time to do so.
Once the end of lease contract negotiations has finished the landlord will supply you a draft of the lease to review and sign.
There are several more things to consider when renting commercial real estate however these suggestions will help get you started. If you are a new business renting space for the first time or an current business who has just leased one or 2 spaces then consider getting help from a tenant rep. Their services don’t cost you anything and you will save a great deal of time and money.