Warehouse LeasingWarehouses are also listed as industrial property within the commercial real estate industry. What does it take when it comes to making a decision about warehouse leasing for your company? Do you know what your future needs will be?What about the difference between buying a warehouse versus leasing a warehouse, and utilizing a specialist broker in the warehouse space silo to help you navigate your potential solutions.
Growth Near Term and in the Future?Do you have enough warehouse space to hold your inventory now and in the future? What about location? Location preferences are sometimes not easily procured due to current market conditions, so how flexible are you? Where does your business go if you outgrow your warehouse space during your leasing term? Typically tenants will quote square footage instead of budget , where truly it is a more of a matter of budget versus square footage of the warehouse property. What about term? Again this is dictated by the current market for leasing a warehouse, in a hot market even a renewal request can be 3-5 yrs as an expectation from the landlord. How long will you need a warehouse? Leasing a warehouse in Austin’s market in 2016 requires minimums of 3-5 yrs for the most part, in hot markets landlords do not get very excited about leasing their property for 1-2 yrs when the demand is so high. Think about it, if you owned a rental would you want a tenant longer term or short term and turning the property every couple years for new tenants? Commercial real estate is about positive cash flow over a longer term not short term- again though this is market dependent.
What is it going to take?Leasing a warehouse will require at minimum the following requirements from any tenant.
- Credit- good credit , startups with so so credit can expect extra security deposits and personal guarantees to be put in place
- Tenant improvements- don’t expect to always find a warehouse that matches all of your needs exactly – although warehouse properties typically do not require the extensive finish out that office space or retail may require.
- Power- how much power do you require and what are you going to use it for?
- Noise factors- this may be ok with the industrial complex or not, do you need a standalone? We placed a Bass speaker manufacturer at the airport because noise was such a big factor in finding them a property to lease.
- Hazardous materials- are you using any do you store any? If so, expect extra insurance carrying requirements
- Insurance and Security deposits – don’t ever expect not to have to carry insurance or make a security deposit , it is not reasonable to expect that.