How to Lease Industrial Space

Finding and renting industrial space is different from renting office space or an apartment and requires specific information to ensure you get the space you want at an affordable rate. Here's a rundown of things to bear in mind.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Business Plan
• Attorney
• Preliminary layout
• Copy of the lease form

1. Determine the type of space you'll need. Have a good grasp on requirements for phone, broadband data service, HVAC, gas, water and electricity. You'll want enough power to provide adequate lighting and operate necessary equipment. Take all your needs into consideration when looking at space: storage for both raw materials and finished product, a production area or assembly line, ceiling height, column spacing, dock-high or drive-in truck access, signage, offices and rest rooms. Think about proximity to freeways for access, as well as public transportation, parking requirements and, possibly, rail access.
2. Try to develop a preliminary layout that takes into account all aspects of your operations. The layout should include utility connections for each piece of equipment. With this information, you can determine what type and how much space you'll need.
3. Take a drive through industrial zoned areas where you might want to locate. Look for "space available" signs with names and phone numbers to call for information. Interview brokers with signs advertising promising properties and ask to be taken on a tour of suitable spaces at terms you could afford.
4. Request a copy of the lease form for the space for your and your attorney's review.
5. Provide a viable business plan and financial statement for the landlord's review to facilitate acceptance of your lease offer. Then make a written offer on a form that can be provided by a broker.
6. Remember that commissions are generally paid by the landlord, so using a broker shouldn't cost you anything. But also remember that a landlord's broker may not represent your best interests. In such cases, you can work with your own broker, who can take you on a tour of available properties. Be sure to confirm whom the broker represents.
7. Prepare to negotiate all of the lease terms, not just lease rates. Industrial leases can be long and complex. Make sure the terms of the lease protect the interests of both you and the landlord, and yet are not unreasonable for the tenant.

What to Look For:

• Appropriate zoning
• Suitable location
• Functional space
• Adequate space
• Affordable lease rates and terms

Tips & Warnings

• Although lease rates may be higher than in other locations, consider industrial parks, which are developed with industrial zoning, offer a prestigious atmosphere, and may have amenities that are important for your business, such as common truck docks and rail facilities, extra parking and perhaps even common office facilities.
• Check out enterprise or empowerment zones in certain local jurisdictions that offer tax and employment incentives for businesses to locate there.