Before you start looking for an excellent warehouse space for rent for your small business, you need to get informed about the commercial space leasing process. Being prepared should keep you from making impulsive decisions and costly mistakes thatyou will end up regretting in the future. The following are some insider tips to help make an informed decision when leasing a commercial space your business
Initiate the process of locating commercial space at least 6-12 months before your current lease expires or until your ideal move-in-date. Locating the perfect space and negotiating the deal will take 1-2 months depending upon the size space and current market conditions. In most cases the spaces you like will need some sort of tenant improvements which the time needed will depend on the scope of work.
completely examine your company’s present and future needs. Consult with the different department heads for input as well as some key employees.
Get acquainted with the commercial space terms and definitions. Various landlords say and quote things otherwise. If you are in doubt about what they mean don’t be afraid to ask them to supply more info.
If you are not knowledgeable about the commercial leasing process or the present market conditions then consider engaging the support of a tenant agent. Their services don’t cost you anything because building owners pay all of the leasing fees. The landlord rep will have an knowledgable listing agent advising them so it would be a good idea for you to have one also.
Personally see all of the spaces that meet your needs so thatyou can make a brief list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord reps a lot of questions about the ownership, property amenities, required lease term length, how much the landlord is willing 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 two to three other choices. These extra options will work to your benefit since 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 if the discussions for your first choice go sideways.
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 note. Everything needs to 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. A few of the things you need to consider include the dimensions of the space, the asking foundation rental rates, the necessary lease term, 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 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 commercial space square feet from the asking base rate plus any operating expenses then dividing by 12.
If any of the commercial properties need reconfiguring then it’s important that you determine what improvements you want on each and get preliminary bids. This way if the building owner is offering a tenant improvement allowance you will learn how much out of pocket you will need to pay above and beyond what the building owner is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to return to each landlord to negotiate extra concessions. Make certain you fully understand the total expenses you are expected to cover. Do not 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 offer you the first draft of the commercial lease contract.
Now it is time to review the commercial lease contract. It would be advisable for you to hire an attorney to review the lease. If you have a tenant agent then they can review the lease with you also. Commercial lease language can be negotiated. If you don’t 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 building owner will give you a draft of the lease to review and sign.
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 space for the first time or an current business who has just rented 1 or two spaces then consider getting help from a tenant rep. Their services do not cost you anything and you will save a great deal of money and time.