Turlock Restaurant Week

Renting Out Warehouse Real Estate For Companies


Before you begin looking for a great for your startup company, you must to get informed about the commercial real estate leasing procedure. Being prepared should keep you from making hasty decisions and costly mistakes you will probably regret later on. Below are some insider tips to help make an informed decision when leasing a commercial real estate your company

Start the process of hunting commercial space at least 6-12 months before your current lease expires or until your ideal move-in-date. Finding the correct space and negotiating the deal will require 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.

completely 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 the commercial real estate terms and definitions. Different landlords say and quote things differently. If you are unsure about what they mean do not be afraid to ask them to supply more info.

If you are not knowledgeable about the commercial real estate leasing process or the present market conditions then consider engaging the assistance of a tenant rep. Their services do not cost anything since building owners compensate all of the leasing commissions. The landlord agent will have an knowledgable listing agent representing them so it would be a good idea for you to have one also.

Physically tour all of the spaces that meet your needs so you 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 regarding the ownership, property amenities, required lease duration, how much the landlord is willing to give in tenant improvement allowances, etc..

Do not settle for the first commercial properties you believe is suitable for your needs: continue looking until you have at least two to three alternative choices. These additional options will work to your advantage since you will know what to expect during the lease negotiations and you’ll gain more leverage with numerous building owners competing for your business. 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 choices. These are not legally binding. You never need 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 should consider include the size of the space, the inquiring foundation rental rates, the required 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 are budget conscious then you can quickly narrow down the list by calculating the monthly base rents for each property then removing those that are way above your budget. The monthly base rent is calculated by multiplying the commercial space square feet from the asking base rate and any operating expenditures then dividing by 12.

If any of the commercial buildings require tenant finish-outs then it is critical that you figure out what changes you want on each and get construction bids. That way if the landlord is offering a tenant improvement allowance you will learn how much out of pocket you’ll have to pay above and beyond what the landlord is willing to give.

Carefully analyze and compare the terms of each proposal. Consider whether it makes sense to go back to every landlord to negotiate additional concessions. Be certain you fully understand the total expenses you are expected to cover. Do not get emotionally attached to a certain property until the negotiations are over. Emotional attachment might result in you signing a contract your business can’t live up to.

After negotiations are finalized and you’ve made your selection now it is time to have the landlord provide you the first draft of the commercial rental contract.

Now it is time to review the commercial rental 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 rental contract negotiations has ended the landlord will supply you a draft of the lease to review and sign.

There are many more things to think about when renting commercial real estate however these suggestions will help get you going. If you are a new business renting space for the first time or an current business who has only leased 1 or two spaces then consider getting help from a tenant agent. Their services do not cost you anything and you’ll save a lot of money and time.

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