It’s common for business owners to think they’ll save money by finding the right warehouse themselves and then negotiating their own lease. After all, at its core, finding a property isn’t overly complex – search online, drive around to look at properties, set up a few tours, contact the listing agent, agree on terms, sign, and done.
Right?
Unfortunately, no. That’s an incredibly simplistic description that doesn’t begin to account for all the variables that make searching for industrial or commercial property, not to mention managing the actual transaction, something better left to someone who does this kind of work for a living.
Considerations Before You Begin
In the event that you’re not yet convinced, here’s a short list of information you should have at the ready before you start browsing listings online.
How much space you need today and what you’ll likely need in the future, given the odds of expansing or downsizing.
The lease term. It’s a best practice to reference trending market prices, and you should be very clear on your short and long-term needs.
Whether you need a Class A, B or C warehouse. Obviously, you’ll need to understand the differences between the classes, and why they matter.
The best part of town for your warehouse. Beyond details access to the freeway and truck terminals, take note of areas that are prone to flooding and those with less than ideal data communication infrastructures. Researching these details can take time, so make sure to allow for that.
How to quickly and easily search for all suitable properties in the right part of town. You should be able to trim your options by factoring for details like docks, office sizing, eave height, drive-in doors, fire sprinkler capacity, rail service, column space, zoning, asking rents, available power, and many other specific features. To make comparisons easier, you should compile the results in a spreadsheet.
Next Steps
Once you’ve made it to this point, the next step is contacting the landlord or listing agent. This communication will begin another flurry of activity.
Property tours. Avoid costly mistakes with our tips.
Evaluating properties after touring, and comparing/contrasting each in terms of multiple factors – the landlord’s portfolio vacancy, his negotiating tendencies in relation to his asking rates, the number of offers on the table, overall submarket vacancy, and more. We wrote a free guide to help you avoid missteps in this area too.
Then it’s time to really get to work.
Make an offer or assemble and submit an RFP.
Evaluate the responses and finalize negotiations. There is room here to save both time and money, but only if you handle this part of the transition properly. Are you equipped to do that?
Review the many, many lease document pages and submit your revisions. To manage the properly, review REIT leases.
This outline gives you an idea of the steps and some of the variables in the industrial lease process. If you’re sure that you can save time and money doing it yourself, while still keeping your business operating, we hope these guides will help.
If, however, you’re realizing that all of this work is better left to someone who doesn’t need a guide to handle the process well, let Miller Industrial Properties save you time and money. Services come at no cost to you, so contact us today.
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