How to Find and Negotiate Small Warehouse Space for Rent
Finding a small warehouse space for rent sounds like it should be easy. It’s a common type of real estate, and there are plenty of places to find it. You can open an online directory or even the local newspaper, schedule some visits, meet with a few landlords, and sign on the bottom line. How hard can it be?
Renting commercial real estate is about a lot more than just price and square footage. There are a number of variables involved, above and beyond what you would expect to deal with as a residential renter. Among other factors, you may have to deal with:
- Added expenses for maintenance, trash collection, and other services
- Zoning restrictions on your business
- Restrictions or exceptions to rules on modifying or expanding the space
- Ability or inability to connect to infrastructure, such as fiber-optic internet or high-voltage power
- Non-compete clauses with other rental customers
No matter why you need a warehouse space, those are a lot of issues to cover. Without extensive experience in your local rental market, you’ll be hard-pressed to navigate these turbulent waters. Here’s what you should expect when finding and negotiating a small warehouse space for rent, and how you can maximize your odds of success.
Location and Zoning
The three most important words in real estate are “location, location, location.” When you’re renting a small warehouse, you’ve got to keep this in mind. For instance, you want to consider how often you need to access the warehouse. If you just need a storage space for access a few times a year, you can save a lot of money renting an out-of-the-way warehouse space. Conversely, if you want regular, easy access, you’ll have to pay more for a warehouse in a convenient location.
Even so, “convenient” can mean different things depending on your application. For instance, are you accepting a lot of overseas cargo shipments? In that case, a location near an airport or harbor makes sense. Are you storing manufactured goods for shipment? In that case, a location nearer to your production source is going to make more sense. If you’re shipping between multiple locations, a warehouse near where the shipping routes cross will make more sense. That way, it can be used as a depot.
Just because a location is convenient, though, doesn’t mean it will necessarily work for you. You’ll also need to think about zoning. Different cities have different regulations, so it’s not enough to consult a table or a chart. You’ll want to personally call the city’s zoning department and ask an actual human being. The landlord may also have restrictions on certain businesses, so you’ll want to make sure your business is acceptable before you sign a lease.
Property Features
If you’re renting a warehouse for simple storage, you’ll only need to think about access for you or delivery trucks. However, customers and employees can complicate matters. If your warehouse requires three people permanently on location, they’re going to need somewhere to park! The same goes for customers, who presumably won’t be showing up at your warehouse on foot. Along the same lines, is the space heated or air conditioned? Depending on your location, this may be essential for your goods, your employees, or both.
Another common concern is internet access. Many warehouses are built in old, out-of-the-way parks that don’t have a high-speed web connection. If you have a security system or camera that requires an Ethernet connection, you’re going to need to know beforehand whether web access is available.
The last concern you’ll have to think about is what kind of trucks you expect to be driving in and out. There may be low bridges or narrow access roads that inhibit larger vehicles. Worse, most small warehouse spaces won’t have 18-wheeler access or dock high loading. If you need these features, you’ll probably want to consider a larger warehouse space. That said, it makes sense to consult with a broker or rep in your local market. You never know what might be available!
Finding the Best Warehouse Space
There are several ways to find a small warehouse space for rent. That said, you have to consider how reliable your sources are. For instance online listings are notoriously inaccurate. They can be based on years-old county tax assessor records, or even the information from the last time the property changed hands. Local classifieds used to be a better starting place. Unfortunately, with the decline of local newspapers, landlords have stopped advertising in them. In many cases, you can be reduced to driving around local warehouse districts, looking for a “for rent” sign.
If this sounds like too much trouble, you should consider hiring a tenant representative, sometimes known as a broker. A broker acts for a renter much like a real estate agent acts for a buyer. They help you find properties that meet your specifications, negotiate a better deal, and help you with the paperwork aspects. In addition, there are a few other reasons you may want to hire a tenant rep.
Why Hire a Tenant Rep?
A tenant rep doesn’t just help you find the best location for your needs. They can also help you with negotiations. This can be helpful even if you’re a seasoned business professional. You might be a great negotiator, but do you really have the time? Let someone else work out the details, while you focus on running your business.
Tenant representatives can actually get you a better deal than you can get on your own. Tell them your needs, and they can easily choose a neighborhood that’s perfect for your business. They might also know about hidden gems that aren’t being advertised.
Finally, a good broker will be familiar with all the local landlords and know how to negotiate with each of them. For instance, some landlords may make a high opening offer, with the intention of bargaining. Others may not be willing to negotiate much at all. Your tenant rep will know this, and will help you get the best possible deal for any given situation.
