Before you begin searching for the perfect wineries near Sonoma for your small company, you need to get educated about the commercial warehouse leasing procedure. Being ready should prevent you from making rash decisions and costly mistakes you will end up regretting in the future. The following are some insider suggestions to help make an informed decision when letting a commercial property your business
Start the process of searching for commercial rental space at least 6-12 months before your current lease terminates or until your perfect move-in-date. Locating the right space and negotiating the deal alonewill require 1-2 months depending on the size space and current market conditions. In most cases the spaces you like will need some sort of modifications which the time needed will depend on the scope of work.
completely analyze your business’s current and future needs. Consult with the different department heads for input in addition to some key employees.
Get familiar with allthe commercial space terms and meanings. Different landlords say and quote things differently. If you are unsure about what they mean do not be afraid to ask them to provide more information.
If you are not knowledgeable about the commercial rental process or the current market conditions then consider engaging the support of a tenant rep. Their services do not cost you anything because landlords pay all of the rental commissions. The landlord representative will have an knowledgable listing agent representing them so it would be a great idea for you to have one as well.
Personally see all of the properties 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 representatives a great deal of questions about who owns the property, property amenities, required lease term length, how much the landlord is willing to give in tenant construction allowances, etc..
Do not settle for the first commercial properties you believe is suitable for your needs: continue looking until you have at least 2 to three alternative choices. These extra options will work to your benefit because you will know what to expect throughout 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 if the negotiations for your first choice fall through.
Send out proposals to your top three to five choices. 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 most suitable for your company, prepare a spreadsheet to do an apples to apples comparison of each property. Some of the things you should consider include the size of this space, the inquiring foundation rental rates, the required lease duration, and the incremental costs (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 simply 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 from the asking base rate and any operating expenditures then dividing by 12.
If some of the commercial properties need reconfiguring then it’s important that you determine what changes you want on each and get preliminary bids. That way if the building owner is offering a construction allowance you will learn just how much out of pocket you’ll have to pay over 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 each landlord to negotiate additional concessions. Be certain you completely 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 lead to 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 offer you the first draft of this commercial lease contract.
Now it is time to review 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 can review the lease with you also. Industrial lease language can be negotiated. If you do not like particular lease items or want to propose new language today is the time to do so.
Once the end of lease contract negotiations has ended the building owner will give you a draft of the lease to sign.
There are many more things to think about when leasing commercial space however these ideas will help get you going. If you are a new company leasing commercial property for the first time or an current company who has just leased 1 or 2 spaces then consider getting help from a tenant representative. Their services do not cost you anything and you’ll save a lot of money and time.