Industrial Property Lease Contract Tips For Tenants

Well before you sign a commercial warehouse space lease contract it’s critical that you conduct your due diligence to be certain that you and the landlord are on the same page as to who is liable for what.

There are a lot of nuances to renting industrial and warehouse properties and even small mistakes might be extremely pricey. Not all industrial properties possess the comparable features so ensure to ask the lessors a bunch of questions concerning them and hire experts (e.g. electrical installer) if necessary to make sure that the spaces will satisfy your needs. To help get you going below are a few things you ought to consider when renting Warehouse as well as Industrial properties:

Heating systems,Ventilation,and A/c (HVAC)– The majority of Industrial buildings aren’t built with whole building HVAC. In the case that the tenant chooses to have it each tenant is on the hook for the install of their own AIR CONDITIONER unit. In a bunch of circumstances you end up renting a space that was already leased by someone else and they had set up and used an HVAC unit. Considering that you don’t find out if that tenant completely preserved the HVAC Unit make an attempt to avoid assuming responsibility of a potentially not cared for unit.

Negotiate with the landlord that you will pay for a HVAC SYSTEM servicing contract to keep the existing HVAC unit property cared for,however if the unit may need a significant service or upgrade the lessor ought to be responsible. Before executing the lease contract you should always require that the lessor have the HVAC systems examined and restored (if necessary) and guaranteed in writing that they are in great working condition by a certified HVAC service tech.

Operating Expenses (also known as NNN)– Make sure you are aware of what is and what is not included in the triple nets and what may possibly be omitted (e.g. roof repairs ). Operating costs almost always include property taxes,insurance,and maintenance. You need to understand what the landlord is going to pay for and what you will be responsible for. You also want to know how tocalculate your monthly warehouse rental cost

Square Footage — Some landlord determine the square footage differently. Make sure you find out how they are performing their computations and what they are incorporating. Preferably you simply want to pay for your usable square footage which is the actual space you occupy. Some lessors will certainly try to incorporate the area underneath the buildings drip lines and some will decide to calculate from the outside of the wall vs the center or inside.

Parking Area– Parking lots need routine maintenance (asphalt or concrete) and a few building owner’s attempt to make the lessees pay for this. Repair services and routine maintenance needs to be the lessor’s responsibility considering that is a long term expenditure and a component of future commercial property value computations. What is the use of the parking? Who exactly will be making use of the parking the most? Do you need to be able to park trailers or motor vehicles overnite? If so make sure you have the capability to.

Zoning– Ensure that the Manufacturing or warehouse commercial property is zoned for your intended use. Some retail lessees (e.g. martial arts) love the thought of renting an industrial space due to the fact that the rental rates are less expensive than retail space. If the space is not zoned for retail space use they will not be able to lease it… unless they or the lessor wants to apply for a zoning update. You also want to be sure the facilities parking ratio (spaces per 1000 sf) is adequate for you. If you need more then think about some other property or rent retail space.

Repair and maintenance of the property– See to it you learn what the landlord is accountable for and what you are going to be responsible for. Garbage will generally be at your cost.

docking areas– Will you have items delivered or picked up via 18 wheeler or UPS style vehicles? If so then you will need dock high loading and a truck court big enough for 18 wheelers to navigate. Do you require the capability to drive trucks or other types of vehicles inside the warehouse space? If so then you may need grade level loading. What ever the case ensure that you ask if the warehouse building has what you need or if the landlord is willing to put in what you need. Trailers and eighteen-wheelers used to be 45 ft +/- however these days the 18 wheelers are 60 ft +/-. What this means is you are in need of at the very least a 120 â ² turning area. Much older Industrial properties might not be able to support this.

Electricity– Ensure that the warehouse buildings possess power appropriate for your requirements. Do you need 3 phase power? If you or the landlord does not have an idea what is available then hire an electrician or electrical engineer to assess the location. You want to ensure that the premises has adequate amperage and power so you don’t blow transformers or learn it’s underpowered later.

Ceiling Height– Make sure you ask how high the ceilings are. If you anticipate stacking products or equipment or running large equipment you want to ensure that you know how high you can go. Clear heights normally vary from 18 feet to 25 ft.

Expansion options– Ask the building owner if any contiguous lessees have extension options. If you intend on expanding in the future it might be great to know if you possess the capability to do so. If your neighbors have an expansion option on your space then negotiate to have the landlord relocate you at the property owners expense.

Flooring Load– What is the floor load for the concrete slab versus what your designated use will be ?

These are only a few things you ought to thoroughly examine before executing an industrial space or warehouse space lease contract. If you think of any questions about renting out industrial property for lease or want to find out how to determine your monthly industrial space rent cost do not hesitate to check with us!