Before you start looking for an excellent warehouse space for your company, you must to get educated about the commercial space leasing procedure. Being ready should keep you from making expeditious decisions and costly mistakes thatyou will probably regret in the future. The following are some insider suggestions to help make an informed decision when renting a commercial property your company
Initiate the process of hunting for commercial space at least 6-12 months before your existing lease expires or until your ideal move-in-date. Locating the correct space and negotiating the deal will require 1-2 months depending upon the size space 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 present and future needs. Consult with the different department heads for input as well as some key employees.
Get familiar with allthe commercial real estate terms and meanings. Various landlords say and quote things differently. If you’re in doubt about what they mean do not be afraid to ask them to get more information.
If you’re not familiar with the commercial leasing process or the present market conditions then consider engaging the support of a tenant rep. Their services do not cost you anything since landlords compensate all the rental commissions. The landlord representative will have an professional listing agent advising them so it would be a great idea for you to have one too.
Personally see all the spaces that meet your needs so thatyou can make a brief list. Keep in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord reps a great deal 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 believe is suitable for your needs: continue looking until you have at least two to 3 alternative options. These extra 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 landlords competing for your tenancy. They also give you something to fall back to if the negotiations for your first choice go silent.
Send out proposals to your top three to five options. These aren’t legally binding. You never want to take a landlord agent’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 should consider include the size of the distance, the inquiring base rental rates, the necessary lease duration, and the incremental expenses (taxes, insurance, maintenance, etc). You can also take note about the pros and cons of each property. If you’re budget conscious then you can quickly narrow down the list by calculating the monthly base rents for each property then eliminating those that are way above your budget. The monthly base rent is calculated by multiplying the commercial space square feet by the asking base rate plus any operating expenditures then dividing by 12.
If some of the commercial property require reconfiguring then it is important that you figure out what changes you want on each and get preliminary bids. That way if the building owner is offering a finish out allowance you will know just how much out of pocket you’ll have to pay above and beyond what the building owner is prepared to give.
Carefully analyze and compare the terms of each proposal. Consider whether it makes sense to return to every landlord to negotiate extra concessions. Make certain you fully understand the total expenses you’re 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 offer you the first draft of the 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 can review the lease with you also. Commercial lease language can be negotiated. If you do not like certain lease items or would like to propose new language now is the time to do so.
When the end of lease contract negotiations has ended the building owner will give you a copy of the lease to review and sign.
There are many more things to consider when leasing commercial space however these suggestions will help get you going. If you’re a new business leasing commercial property for the first time or an existing business who has only leased one or two spaces then consider getting help from a tenant representative. Their services don’t cost you anything and you’ll save a lot of time and money.