Before you begin looking for the perfect Austin warehouse space for your small business, you should to get educated about the commercial warehouse leasing process. Being prepared should prevent you from making foolish decisions and costly mistakes you will come to regret in the future. Below are some insider suggestions to help make an informed choice when leasing a commercial warehouse space your company
Start the process of finding commercial space at least 6-12 months before your existing lease terminates or before your ideal move-in-date. Finding the perfect space and negotiating the deal alonewill require 1-2 months depending on the size area and current market conditions. In most cases the spaces you like will require some sort of improvements that the time needed will depend on the scope of work.
completely analyze your company’s present and future needs. Consult with the different department heads for input in addition to some key employees.
Get acquainted with the commercial real estate terms and meanings. Different landlords state and quote things otherwise. If you are in doubt about what they mean don’t be afraid to ask them to supply more information.
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 don’t cost you anything since building owners pay all the leasing fees. The landlord agent will have an knowledgable listing agent helping them so it would be a great idea for you to have one too.
Physically visit all the properties that meet your requirements so you can make a brief list. Bear in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord reps a lot of questions regarding the ownership, property amenities, required lease term length, how much the landlord is willing to give in tenant improvement allowances, etc..
Don’t settle for the first commercial properties you think is suitable for your requirements: continue looking until you have at least two to 3 other options. These extra options will work to your benefit since you will know what to expect during the lease negotiations and you’ll gain more leverage with multiple building owners competing for your tenancy. They also give you something to fall back to if the negotiations to your first choice go sideways.
Send out proposals to your top three to five options. These aren’t legally binding. You never want 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 company, prepare a spreadsheet to do an apples to apples comparison of every property. Some of the things you need to consider include the dimensions of this space, the inquiring base rental rates, the required lease term, and the incremental costs (taxes, insurance, maintenance, etc). You can also take note about the advantages and disadvantages 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 eliminating those that are way above your budget. The monthly base rent is calculated by multiplying the industrial space square feet from the asking base rate plus any operating expenses then dividing by 12.
If some of the commercial spaces require tenant improvements then it is important that you determine what changes you want on each and get preliminary bids. This way if the building owner is offering a construction allowance you will know just how much out of pocket you’ll need to pay above and beyond what the building owner is willing to give.
Carefully examine and compare the terms of each proposal. Consider whether it is logical to return to every landlord to negotiate extra concessions. Make sure you completely understand the total expenses you are expected to cover. Don’t get emotionally attached to a specific property until the negotiations are over. Emotional attachment might lead to you signing a contract your business cannot live up to.
After negotiations are finalized and you have made your selection now it’s time to have the landlord provide you the first draft of this commercial rental contract.
Now it’s time to review the commercial rental 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 also. Commercial lease language could 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 rental contract negotiations has finished the building owner will supply you a copy of the lease to review.
There are many more things to think about when leasing commercial property however these ideas will help get you started. If you are a new company leasing commercial property for the first time or an existing company who has only rented 1 or two spaces then consider getting help from a tenant agent. Their services do not cost you anything and you’ll save a great deal of time and money.