Improvements to Warehouse Space

Sometimes referred to as the improvement  period , the improvements to warehouse space is the period that immediately precedes the start date of your lease term. Typically a tenant receives access to the premises 30-90 days before they open. This way the warehouse space can improve or commonly known as built out.  The negotiation of the improvements to warehouse space period is critical.  First the landlord must provide the tenant with the vacated space.  If  a lease has been executed by the tenant with a current tenant occupying the space, it should stipulate when the current tenant shall vacate the premises.Obviously, you cannot take possession of a space that is already occupied.  Sometimes this date coincides with the improvement date but not always.

If an existing tenant does not vacate

The key question is , what happens if the current tenant does not vacate the warehouse space until after your improvement date starts? Maybe the current tenant has moved out but the space has damage and or not clean? As a good rule of thumb it is a good idea if there is a present tenant to state that the improvement period shall commence 5 days after you take possession.  Tenants typically do not know how to negotiate the improvement period.It is also common for a tenant to trip up on the meaning of lease execution versus lease commencement dates.  There are considerations around delays on improvements that are caused by the landlord or caused by the tenant. Each circumstance is different.

Typical carpet and paint takes about 2 weeks maximum 3 weeks. Extensive build out with contractors involved could take alot longer. The issue for the tenants doing improvements is delays. Some improvements have improvements do not complete in time. It starts eating away at the free rent periods and it could absorb all of your free rent. This leaves you no savings to run your business during the initial months of your lease term. Landlord delays are a bit different, if the delay is the landlord’s fault, then the dates should be shifted to accommodate the delays that are occurring.

If you can complete the improvements before your lease commence date , then you can negotiate a clause for you to be able to operate before your free rent kicks in.  Shire Commercial helps tenants lease office and warehouse properties in Austin ,TX . Tenants benefit from the importance of understanding strategic negotiations that are part of a discussion with Shire Commercial’s services.