Before you begin looking for the perfect Austin warehouse space for rent for your startup company, you need to get informed about the commercial property leasing process. Being prepared will help prevent you from making impulsive decisions and costly mistakes you will come to regret later on. Below are some insider tips to help make an informed choice when renting a commercial warehouse space your business
Initiate the process of searching for commercial space at least 6-12 months before your existing lease expires or until your perfect move-in-date. Locating the correct space and negotiating the deal alonewill take 1-2 months depending upon the size space and current market conditions. In most cases the spaces you like will require some sort of changes which the time needed will depend on the scope of work.
Thoroughly research your business’s current 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 differently. If you’re unsure about what they mean don’t be afraid to ask them to get more information.
If you’re not knowledgeable about the commercial property leasing process or the current market conditions then consider engaging the support of a tenant representative. Their services don’t cost you anything since landlords compensate all of the rental commissions. The landlord agent will have an experienced listing agent representing them so it would be a great idea for you to have one too.
Personally visit all of the spaces that meet your requirements so you can make a brief list. Keep in mind that the designs can be reconfigured so don’t get stuck on that. Ask the landlord agents a great deal of questions regarding the ownership, property amenities, required lease duration, how much the landlord is prepared to give in tenant construction allowances, etc..
Don’t settle for the first commercial properties you believe is suitable for your requirements: continue searching until you have at least two to 3 alternative options. These extra options will work to your benefit because you will know what to expect throughout the lease negotiations and you will gain more leverage with multiple landlords competing for your company. They also give you something to fall back to whether the discussions to your first choice fall through.
Send out proposals to your top three to five options. These are not legally binding. You don’t ever need to have a landlord agent’s verbal word. Everything needs to be in writing.
To help you decide what property is most suitable for your company, prepare a spreadsheet to do an apples to apples comparison of each property. A few of the things you need to consider include the size of this space, the asking base rental rates, the necessary lease duration, and the incremental costs (taxes, insurance, maintenance, etc). It is also possible to take note about the advantages and disadvantages of each property. If you’re 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 over your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate and any operating expenses then dividing by 12.
If some of the commercial spaces require tenant improvements then it’s 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 know just how much out of pocket you will 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 makes sense to go back to each landlord to negotiate extra concessions. Be sure you fully understand the total expenses you’re expected to cover. Don’t get emotionally attached to a certain property until the discussions are over. Emotional attachment might lead to you signing a contract your business can’t live up to.
After discussions are finalized and you’ve 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. If you have a tenant representative then they can review the lease with you also. Industrial 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.
Once the end of rental contract negotiations has finished the landlord will supply you a copy of the lease to sign.
There are several more things to think about when renting commercial real estate however these ideas will help get you going. If you’re a new company renting commercial space for the first time or an existing company who has only leased 1 or two spaces then consider getting help from a tenant agent. Their services don’t cost you anything and you will save a lot of time and money.