Recommendations For Negotiating The Best Deal When Searching For Industrial Warehouse Property To Lease

Before you start searching for the perfect warehouse space for rent for your small business, you need to get educated about the commercial real estate leasing procedure. Being prepared should help prevent 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 choice when renting a commercial property your company

Start the process of finding commercial space for rent at least 6-12 months before your existing lease expires or before your ideal move-in-date. Finding the perfect space and negotiating the deal alonewill require 1-2 months depending upon the size area and current market conditions. In most cases the spaces you like will require some sort 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 meanings. Various landlords say and quote things otherwise. If you’re unsure about what they mean don’t be afraid to ask them to get more information.

If you’re not familiar with the commercial rental process or the present market conditions then consider engaging the help of a tenant rep. Their services don’t cost anything since landlords compensate all of the rental commissions. The landlord agent will have an expert listing agent representing them so it would be a great idea for you to have one too.

Physically see all of the spaces that meet your requirements so thatyou can make a short list. Bear in mind that the layouts 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 prepared to give in tenant improvement allowances, etc..

Do not settle for the first commercial space you think is acceptable for your requirements: continue searching until you have at least two to three alternative choices. These additional options will work to your benefit since you will know what to expect during the lease negotiations and you’ll gain more leverage with numerous landlords competing for your company. They also give you something to fall back to whether the negotiations for your first choice fall through.

Send out proposals to your top three to five choices. These aren’t legally binding. You don’t ever want to have a landlord representative’s verbal note. Everything should 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 put into consideration include the size of the distance, the inquiring foundation rental rates, the necessary lease term, 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 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 is important that you determine what improvements you want on each and get preliminary bids. That way if the landlord is offering a tenant improvement allowance you will learn just how much out of pocket you’ll have to pay over and beyond what the landlord is prepared to give.

Carefully analyze and compare the terms of each proposal. Consider whether it is logical to return to every landlord to negotiate extra concessions. Be certain you completely understand the total expenses you’re expected to cover. Do not 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’ve made your selection now it’s time to have the landlord offer you the first draft of the commercial lease contract.

Now it’s 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 agent then they could review the lease with you as well. Commercial lease language could be negotiated. If you don’t like particular 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 provide you a draft of the lease to review.

There are several more things to consider when leasing commercial real estate however these tips will help get you going. If you’re a new business leasing commercial property for the first time or an existing business who has just rented 1 or two spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you’ll save a lot of money and time.