The Right Way To Locate & Rent Industrial Space

Before you start looking for an excellent for your small business, you will need to get informed about the commercial real estate leasing process. Being prepared will prevent you from making hurried decisions and costly mistakes thatyou will end up regretting later on. The following are some insider suggestions to help make an informed decision when renting a commercial real estate your business

Start the process of locating commercial rental space at least 6-12 months before your current lease terminates or until your perfect 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 required will depend on the scope of work.

Thoroughly examine your business’s current and future needs. Consult with the different department heads for input as well as some key employees.

Get acquainted with allthe commercial space terms and meanings. Various landlords say and quote things differently. If you are unsure about what they mean do not be afraid to ask them to get more info.

If you are not familiar with the commercial property leasing process or the current market conditions then consider engaging the support of a tenant representative. Their services do not cost anything since landlords pay all the leasing commissions. The landlord rep will have an experienced listing agent helping them so it would be a great idea for you to have one also.

Physically visit all the spaces that meet your needs 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 reps a great deal 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 space you think is suitable for your needs: continue looking until you have at least 2 to 3 alternative choices. These extra options will work to your advantage because you will know what to expect during the lease negotiations and you’ll gain more leverage with multiple landlords competing for your business. They also give you something to fall back to if the negotiations to your first choice go silent.

Send out proposals to your top three to five choices. These are not legally binding. You never want to have a landlord representative’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. Some of the things you should put into consideration include the dimensions of this distance, the asking base rental rates, the required lease duration, and the incremental expenses (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 simply 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 by the asking base rate and any operating expenses then dividing by 12.

If any of the commercial property require reconfiguring then it’s important that you figure out what changes you want on each and get construction bids. This way if the building owner is offering a finish out allowance you will know how much out of pocket you’ll have 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 makes sense to return to each landlord to negotiate additional concessions. Be certain you fully 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 thatyour 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 representative then they can review the lease with you also. Commercial lease language can be negotiated. If you do not like particular lease items or would like to propose new language today is the time to do so.

When the end of rental contract negotiations has ended the building owner will give you a copy of the lease to review and sign.

There are several more things to consider when renting commercial space however these ideas will help get you going. If you are a new company renting commercial space for the first time or an current company who has just leased one or 2 spaces then consider getting help from a tenant rep. Their services do not cost you anything and you’ll save a great deal of time and money.