Techniques For Attaining The Very Best Deal When Searching For Industrial Property To LeaseTechniques For Attaining The Very Best Deal When Searching For Industrial Property To Lease
Before you begin searching for a good warehouse space for your small company, you must to get educated about the commercial real estate leasing procedure. Being prepared should help prevent you from making rapid decisions and costly mistakes thatyou will regret in the future. The following are some insider suggestions to help make an informed choice when letting a commercial space your company
Start the process of finding commercial space for rent at least 6-12 months before your current lease expires or before your ideal move-in-date. Locating the perfect space and negotiating the deal alonewill take 1-2 months depending upon the size space and current market conditions. Typically the spaces you like will require some type of improvements which the time required will depend on the scope of work.
Thoroughly research your company’s present and future needs. Consult with the various department heads for input as well as some key employees.
Get familiar with allthe commercial space terms and definitions. Different landlords say and quote things differently. If you’re unsure about what they mean don’t be afraid to ask them to provide 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 agent. Their services don’t cost anything since building owners pay all the rental fees. The landlord representative will have an knowledgable listing agent helping them so it would be a great idea for you to have one also.
Personally tour all 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 lot of questions about the ownership, property amenities, required lease duration, how much the landlord is willing to give in tenant improvement allowances, etc..
Don’t settle for the first commercial properties you believe is acceptable for your needs: continue looking until you have at least two to three other choices. These extra options will work to your benefit because you will know what to expect during the lease negotiations and you will gain more leverage with numerous building owners competing for your company. They also give you something to fall back to whether the discussions to your first choice fall through.
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 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 advantages and disadvantages 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 removing those which are way over your budget. The monthly base rent is calculated by multiplying the commercial space square feet by the asking base rate and any operating expenditures then dividing by 12.
If any of the commercial spaces require tenant improvements then it’s important that you determine 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 need to pay over and beyond what the landlord is willing to give.
Carefully examine and compare the terms of each proposal. Consider whether it makes sense to go back to each landlord to negotiate additional concessions. Be certain you fully understand the total expenses you’re expected to cover. Don’t get emotionally attached to a specific property until the discussions are over. Emotional attachment might lead to you signing a contract thatyour business cannot 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 rental contract.
Now it is time to reassess the commercial rental contract. It would be wise for you to hire an attorney to review the lease. If you have a tenant agent then they could review the lease with you also. Industrial lease language could be negotiated. If you don’t like certain lease items or would like to propose new language now is the time to do so.
When the end of rental contract negotiations has finished the landlord will give you a copy of the lease to review.
There are many more things to think about when leasing commercial real estate however these suggestions will help get you started. If you’re a new company leasing space for the first time or an current company who has just leased 1 or two spaces then consider getting help from a tenant representative. Their services do not cost you anything and you will save a lot of money and time.