9 things to consider before leasing a warehouse space

leasable warehouse

If you are a business owner looking for warehouse space for rent, it is essential to understand that not all warehouse spaces are created equal. Doing some preliminary research will save you time, money, and disappointment later on if you choose a warehouse space that does not really work for you and your business.

Warehouse and industrial space may be used for various purposes, including storage, production, and distribution. Each Industrial property you consider will have its own set of specifications and responsibilities, so make sure you understand the facility’s intended use and ask the landlord and listing agent relevant questions to ensure space meets your requirements.

1. Check your storage consumption

Some landlords measure square footage in a particular way. Check to see if they’re doing their calculations and what they’re including. You should ideally just pay for your available square feet, which is the actual room you occupy. Some landlords will attempt to include the area under the building’s drip lines, while others will measure from the outside the warehouse.

In addition to looking at the available square footage in a factory, you will even need to consider cubic square footage. This is where the ceiling height comes into play. If you need to stack items, boxes, or pallets, make sure you have enough vertical space. If you don’t need stacking space, there’s no reason to pay to rent space with a high ceiling.

2. Zoning

Land in a municipality is divided into zones to ensure urban growth and development. Zones define the types of businesses and properties that are allowed. They can be commercial, manufacturing, or residential.
It is critical to consider where your prospective property is located and its assigned zone. Industrial lease prices can be lower, but if the warehouse space is to be used for retail, a landlord must be able to apply for a zoning amendment.

3. Parking Area

Parking lots need maintenance (asphalt or concrete), which some landlords try to charge tenants for. A parking lot may be used for a variety of purposes, including employee parking, deliveries and pickups, overnight parking, and regular use. Repairs on parking area should be the landlord’s liability because they are a long-term cost and part of calculating potential property value.

The parking lot must be large enough to accommodate your business. If your company relies on tractor-trailer delivery, the parking lot must be wide enough to accommodate these vehicles. Confirm that trucks and other vehicles are permitted to park in the lot overnight if necessary.

4. Heating, Ventilation and Air Conditioning (HVAC)

The majority of warehouses are not equipped with full building HVAC. If they choose to have it, each tenant is responsible for installing their own HVAC unit. In a lot of cases, you end up leasing a space that was previously leased by someone else, and they had installed and used an HVAC unit. Because you don’t know if that last tenant properly maintained the unit try to avoid assuming the responsibility of a potentially neglected unit. Negotiate with the landlord to pay for an HVAC maintenance contract to keep the existing HVAC unit properly maintained. However, if the unit needs a major repair or replacement, the landlord should be responsible. Before signing the contract, always require that the landlord have the HVAC units inspected and repaired (if needed) and certified in writing that they are in good working condition by a certified HVAC technician.

5. Operating Expenses

The operating costs and whether they will be included in the lease are an important part of regular warehousing operations. Consider what your contract includes and excludes, such as roof repairs, taxes, insurance, and maintenance. As the tenant, you could be responsible for any or all of these costs. You can inquire about everyday maintenance costs, such as who will be in charge of the lawn and garbage. Your primary goal is to identify possible warehouses that can handle your volume while still keeping the products secure in the interim. Price should not be the first goal, but it will become one eventually. When you’ve narrowed your options down to a couple or three, it’s time to see who has the best prices for the functions you need.

6. Electrical Capacity

Be sure to ask the landlord about the building’s power supply to ensure it meets your electrical needs. Before leasing out the warehouse, you should consider if it has enough electrical outlets. If you intend to use heavy electric vehicles inside the factory, make sure you have enough power for charging and day-to-day operations. It would be best if you considered hiring an electrical engineer or electrician to inspect and evaluate any warehouse property for lease. They would be able to tell you if the building has enough amperage and power to prevent extreme events, such as a transformer blowing up.

7. Loading Docks

Loading docks are critical for ensuring secure and effective building access and are often ignored when leasing warehouse space.  Large or long vehicles will need additional turning and repositioning space. Numerous older industrial buildings can be incapable of accommodating large vehicles. 
The type of dock is also critical to consider, as certain products are extremely vulnerable to the elements, and not all docks are weatherproof. Several popular types of loading docks include the following:

  • Open- The truck backs up to an exposed open dock area. These are also more difficult to handle in inclement weather.
  • Depressed- These docks have an inclined driveway, which requires the driver to exercise extra caution to avoid damaging the house.
  • Flush- These seem to be the most popular docks, with the loading dock opening flush with the structure. Ensure that there is a dock bumper outside to protect the building from damage during docking.
  • Enclosed- These docks are protected from the elements by a shell. These usually need ventilation to prevent unsafe amounts of automotive fumes from accumulating.
  • Sawtooth- In buildings with restricted road space, trucks may be required to park at an approximately 45-degree angle to the dock, forming a sawtooth pattern. This usually needs additional room from the warehouse but has the benefit of aligning the trucks for easy exit.

8. Location

When deciding where to lease warehouse space, keep your location in mind. Conduct a study on the surrounding area prior to signing a warehouse contract. Is the warehouse conveniently located near major highways? Are there any restaurants or service businesses in the area that your employees might patronise? Are zoning laws in the region permissive for your company to run a warehouse?. Additionally, you’ll want to consider how your workers can get to the new place, whether by public transportation or accessible parking. Understanding the area’s existing commercial real estate market dynamics will assist you in determining whether proposed rents are appropriate.

9. Security

When considering renting warehouse space, this could be the most important factor to consider. If you’re storing a lot of valuable items in the warehouse, you’ll want to make sure they’re safe. If your warehouse is broken into and your goods are stolen, you will lose a lot of money. Is the area around the warehouse fenced, and do you need a code to get into the warehouse? This is a vital first step in security since a fence would prevent many thieves from attempting to gain entry into the warehouse. You can also consult with your landlord and, if necessary, install electrical fencing for your warehouse. Is there any monitoring? Daily patrols of guards will also serve as a significant deterrent to criminals.

Conclusion - Plan before leasing a warehouse space

Although running a warehouse is different from running a standard office space, there is still some overlap. Simple amenities like men and women’s bathrooms, break areas, and employee parking or access to public transit are important considerations. You might also want to check the availability of high-speed internet at that location, in case your warehouse management software (WMS) or inventory management system (like Digital Warehouse) requires the internet to be used.

Then there are warehouse-specific features to consider, such as space’s ability to handle a variety of goods and your form of business. If your business produces perishable goods that need refrigeration or if your business generates hazardous waste, these are the types of concerns you can raise before signing the lease contract. You’ll want to have a strategy in place for storing and disposing of any raw materials or byproducts safely.

Due to the fact that leasing commercial space is typically a multi-year investment, it’s a good idea to look for additional open space at that warehouse or another nearby. Thus, if you do outgrow the square footage included in your contract, you can expand without uprooting and jeopardising your current setup’s performance. Changing your storage and fulfilment centre is disruptive to your business, and you want to minimise this disruption wherever possible.

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