Before you start looking for the perfect Austin warehouse space for rent for your startup, you must to get educated about the commercial real estate leasing process. Being prepared will keep you from making impulsive decisions and costly mistakes you will regret later on. Below are some insider suggestions to help make an informed choice when letting a commercial space your business
Initiate the process of hunting commercial space at least 6-12 months before your existing lease expires or until your ideal move-in-date. Finding the correct space and negotiating the deal will take 1-2 months depending on the size space and current market conditions. Typically the spaces you like will need some type of improvements that the time required will depend on the scope of work.
completely research your business’s present and future needs. Consult with the various department heads for input as well as some key employees.
Get acquainted with the commercial property terms and definitions. Different landlords state and quote things otherwise. If you are in doubt about what they mean don’t be afraid to ask them to get more info.
If you are not knowledgeable about the commercial rental process or the present market conditions then consider engaging the help of a tenant representative. Their services don’t cost you anything because building owners pay all of the rental commissions. The landlord agent will have an knowledgable listing agent advising them so it would be a good idea for you to have one as well.
Personally see all of the spaces that meet your needs so you can make a brief list. Bear in mind that the layouts can be reconfigured so don’t get stuck on that. Ask the landlord agents a lot of questions regarding the ownership, property amenities, required lease duration, how much the landlord is willing to give in tenant construction allowances, etc..
Don’t settle for the first commercial properties you think is acceptable for your needs: continue looking until you have at least 2 to three other options. These additional options will work to your benefit since you will know what to expect throughout the lease negotiations and you’ll gain more leverage with numerous building owners competing for your tenancy. They also give you something to fall back to if the discussions for your first choice go sideways.
Send out proposals to your top three to five options. These are not legally binding. You never want to have a landlord agent’s verbal word. Everything needs to be in writing.
To help you decide what property is best suited for your business, 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 the distance, the asking foundation rental rates, the necessary lease duration, and the incremental costs (taxes, insurance, maintenance, etc). It is also possible to 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 removing those that are way above your budget. The monthly base rent is calculated by multiplying the industrial space square feet by the asking base rate and any operating expenditures then dividing by 12.
If any of the commercial properties need finish out then it is important that you figure out what changes you want on each and get preliminary bids. That way if the building owner is offering a finish out allowance you will learn just how much out of pocket you’ll need to pay above and beyond what the building owner is willing to give.
Carefully analyze and compare the terms of each proposal. Consider whether it is logical to go back to each landlord to negotiate extra concessions. Make certain you completely understand the total expenses you are expected to cover. Don’t get emotionally attached to a certain property until the discussions are over. Emotional attachment might result in you signing a contract your business cannot live up to.
After discussions are finalized and you have made your selection now it’s time to have the landlord provide you the first draft of the commercial rental contract.
Now it’s time to reassess the commercial rental contract. It would be advisable 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 as well. Commercial lease language can be negotiated. If you don’t like particular lease items or would like to propose new language now is the time to do so.
Once the end of rental contract negotiations has ended the building owner will provide you a copy of the lease to review.
There are several more things to consider when leasing commercial space however these tips will help get you going. If you are a new business leasing space for the first time or an existing business who has just rented one or 2 spaces then consider getting help from a tenant agent. Their services do not cost you anything and you’ll save a lot of time and money.