Entering into an office lease agreement is a big decision that can impact the financial success of your business. If your business has grown substantially that you require addition space, leasing retail space or warehouse space is a good idea. However, this does not mean that you should enter into any lease agreement. Entering into an office lease agreement requires careful consideration, research, and understanding the specifics of the lease.
The inclusions of the lease agreement
You will be giving up a portion of your income every month to rent this commercial warehousing space, so it is important that you know what is included. In your contract, you will want to check that it lists the size of the building you are renting, the specific amenities that are included, and the overall cost of the rental. Specific amenities might include cleaning services, repairs and maintenance, and additional storage space. If your business requires any of these services, you will want to negotiate them into your contract.
When your monthly payment is due
Many renters assume that their rent payment is due on the first of the month. However, this is not always the case. When entering into an office lease agreement, make sure you negotiate a due date that works best for you. Most landlords are willing to change the due date, as long as they are still receiving payment once a month. Additionally, you will want to understand any late payments and how soon they are charged.
The length of your lease
When first entering into an office lease agreement, it might seem like a good idea to opt for a one year lease. That way, if the business does not take off as expected, you can easily end your lease. Although this is a smart financial decision, you also want to understand what it takes to extend your lease. You don’t want to be forced to move your distribution warehouse space because the landlord will not rent to you for another year. You also don’t want to have to move because the landlord took advantage of your business success and doubled, or tripled your rent price. Always include a lengthy or extension addendum or option in the contract. Since 2000, the amount of occupied distribution and warehouse space has increased by 86.2%. Make sure you have a place to rent next year, if needed.
The approved services of the warehouse space
Many business owners fail to do sufficient research into the approved uses of their commercial real estate development space. For example, some buildings are zoned for only commercial or residential use. Renting a residential space and then selling products out of the garage is not allowed. It is also possible that you rent a warehouse space and attempt to provide customer services there, which may also not be allowed. It is important to understand zoning laws and to know what your lease agreement allows.
In many cases, using a building for a different reason than its intended purpose can void your contract and you are forced to leave, without getting your money back. Retail spaces are expected to grow in demand, as Ecommerce is projected to grow at a compounded annual average rate of 10% over the next five years, creating tremendous opportunities for owners and developers of warehouse and distribution space, as well as Ecommerce business owners.
Many businesses choose to rent warehouse and office space, until they are successful enough to purchase. Entering into an office lease agreement is a big decision, however, and should be carefully considered. It is important that you understand every part of your lease, as it could affect the outcome of your business success. Approximately 166,907 men and women in the U.S. work in the storage and warehouse leasing industry. It is a booming industry that is only expected to grow.