How to Find and Secure Commercial Warehouse for Rent
When you first launched your business, a simple public warehouse storage unit may have been enough. However, as time passes and business starts to boom, more storage is simply a must. When that happens, finding and securing a commercial warehouse for rent quickly becomes a priority.
Choosing the right commercial warehouse for rent may seem tricky. However, by approaching the situation strategically, you can not only find a space that meets your needs but also negotiate a great contract that leaves you in the best position possible. With that in mind, here are answers to some common questions aspiring warehouse renters may have about finding and securing commercial real estate for your business.
What Should I Look for When Renting a Warehouse?
Location
As with other kinds of commercial real estate property, the location of the warehouse does matter. You want a facility that has convenient access to critical roadways, the nature of which may vary depending on the exact nature of your business.
For example, if your warehouse supports several retail stores in different areas, you may prefer a location with quick access to highways or interstates. If products will be moved in and out of the facility using tractor-trailers, you might want to avoid warehouses that require travel through small roundabouts, winding country roads, or similar challenging roadways.
Square Footage
When it comes to finding a commercial warehouse for rent, square footage is probably one of the most critical factors. Not only does the number of square feet (sf) impact how much room you have for storing items, but it also affects the price of the space.
Ideally, you want a warehouse that’s large enough to support current operations, as well as some future growth, without paying for more than you may need. Figuring out how many sf is necessary does require some math estimates and will vary from one business to the next.
The size of your products, how they need to be stored, and the equipment you may need to move it – particularly machines like forklifts that require wide aisles to navigate the facility – all play a role in determining your square footage requirements.
Height
You also want to look at the internal ceiling height when evaluating possible commercial warehouses for rent. The ceiling height determines how high you can stack items, the height of any shelving you want to install, and more.
Warehouse internal ceiling heights can vary dramatically. Additionally, this information isn’t always in the rental listing. As a result, you may need to inquire about the ceiling height directly to get this information.
Floor Strength
Many people who are new to renting commercial warehouse space don’t realize that not all floors are created equal. Some can support more weight than others, and it’s important to factor this into your search if the items you need to store are heavy or if you want to stack a lot of weight in a small area.
Before you sign a lease, ask the landlord about the floor load capacity. This will give you an idea of whether the building can hold the amount of weight you intend to place upon it, ensuring it meets your needs.
Features
In some cases, you’ll need specific features to make sure the warehouse space meets your needs. For example, you might want a separate office space in the building. That way, you can use the office space to handle other business operations, ensuring you don’t have to leave the facility.
Climate control may also be crucial. Some products are impacted by heat, cold, or humidity, so you may need options for stabilizing conditions in your warehouse.
Similarly, you may even require refrigerators, freezers, or similar systems. If that’s the case, you need to focus your commercial warehouse rental search on facilities that already have them in place or have the ability to support such an installation.
Lease Length Options
Your lease length can play a role in your monthly rent. If you agree to a longer-term, you may be able to negotiate a lower monthly cost. Essentially, the landlord gives you a discount in exchange for the financial security of having a long-term tenant.
However, if you only need to rent the commercial property for a short period, you don’t want to sign a lease that reflects a longer commitment. For example, if you need to use the space for nine months, you shouldn’t consider properties that have a minimum lease term of one year.
Where Should I Look for a Commercial Warehouse for Rent?
Online Searches
It is possible to find a commercial warehouse for rent on your own. Usually, if you intend to go this route, an online search is going to be your starting point. You can either head to a major commercial real estate rental website or go to a search engine and look up “warehouse space for rent near me.”
When you find a rental site, use the menu filter options, feature-related keywords, sf ranges, and zip code limiters to get your initial results. Then, drill down into those results, creating a starting list of properties that could work. Once you have those, you can either contract broker professionals or work with the landlord directly.
Tenant Representatives
In many cases, using a tenant representative to find a commercial warehouse for rent is your best bet. You’ll gain access to experienced broker professionals who can help you locate commercial properties that meet your needs, as well as negotiate a lease that works well for you.
Essentially, tenant representatives can act as your ally. Plus, they are well informed regarding area trends, average rent costs, and other points that can help ensure you get a good deal.
How Is Commercial Warehouse Rent Calculated?
Usually, commercial warehouse rent prices are calculated based on the square footage of the warehouse. The calculation is:
Sf in the warehouse x price per sf = rent
Landlords may quote the warehouse rent cost in one of two ways. First, they may use a yearly price per sf figure. For example, if the annual price per sf is $10.68, the yearly rent for a 5,000-sf facility would be $53,400. That would create a monthly cost of $4,450 ($53,400 / 12).
Other commercial real estate owners may quote the rent price using the monthly price per square foot. If the monthly cost per sq ft is $0.89, and it’s a 4500-sf facility, the monthly rent, based on the formula above, would be $4,005.00.
Now, these figures are just base rent. There are other costs beyond the monthly rent that you’ll also have to contend with, some of which vary depending on the type of lease in place.
What Are the Costs Beyond Monthly Rent for Renting a Commercial Warehouse?
Operating Expenses
In many cases, you also have to pay certain estimated operating expenses monthly. If you have a Triple New Lease – also called an NNN – you’ll have to shoulder the property taxes, utilities, insurance, common area maintenance (CAM), and certain kinds of building maintenance.
Like rent, most landlords quote either a monthly or yearly cost per sf to cover the operating expenses. As a result, you use the same calculation to determine this expense, multiplying the warehouse square footage by the cost per sf.
Deposits
Like residential leases, renting a warehouse usually requires a security deposit. This is a specific amount that you have to pay upfront, giving the landlord a financial cushion against any damage – beyond normal wear-and-tear – that may occur while you are renting the space.
If no damage occurs, most security deposits are refundable. The only exceptions are usually related to owing back rent or if there are legal clauses in your lease that allow it to be directed toward other purposes.
While residential rentals usually have a legal limit set by the state regarding the size of the security deposit, that isn’t always the case with commercial real estate properties, including warehouses. However, it is usually at least one to two months’ rent, though it could potentially be higher.
It’s also important to note that you may need to handle other kinds of deposits. For example, some utility companies may require a deposit if service is transitioned into your (or your company’s) name.
Other Expenses
In some cases, you’ll need to make specific improvements or changes to a warehouse to ensure it meets your needs. For example, you might need to install temporary walls, fixtures, or even HVAC if the landlord isn’t willing to shoulder that expense
