10 Quick Tips When Leasing Industrial Space
Relocating constitutes a major decision for any business. However, industrial tenants face a far different set of considerations - and challenges - than their residential, office, and retail counterparts. Recognizing this reality, in this article I’ll discuss some key items to help businesses as they lease industrial space.
Tip 1: Location, Location, Location
You typically hear this mantra when it comes to residential real estate, but good location is absolutely critical for leasing industrial space, too (albeit for different reasons).
Most importantly, the location of industrial spaces must support the logistical needs of the company.
Does your company need highway access? Rail access? Do you need to be near port facilities?
Bottom line, it doesn’t matter how outstanding the space itself is. If the location doesn’t support the company’s operational logistics needs, the property will not work.
Local commercial real estate professionals can help you determine the ideal location for your market and unique situation - need help finding reliable ones in your area? Drop us a note!
Tip 2: Determine Loading Needs
Related to location, an industrial space’s loading capacity needs to support the receiving and distribution needs of a company.
Does your company distribute nationally and need semi-truck support? Or, do you work on a smaller-scale, more local level?
How you answer the above will help determine whether your company’s logistics needs require dock or grade-level loading, as choosing the wrong option can seriously disrupt your company’s operations.
Tip 3: Confirm Zoning Status
Just because you find an industrial property, it may not be zoned to support your industrial needs.
Most municipalities do not view “industrial” as a single zoning type. Rather, this term often serves more as an umbrella, with a variety of different zoning codes for sub-types of industrial spaces falling under it.
Be sure that any industrial property is zoned to support your specific needs and operations.
Municipal zoning rules can seem extremely complicated and overwhelming - need help figuring them out? Drop us a note!
Tip 4: Never Overlook Safety and Security
Businesses cannot afford avoidable mishaps in the workplace. As such, you absolutely must ensure that an industrial space fully complies with state and federal health and safety standards. In addition to keeping your workers healthy, this due diligence can also help you avoid serious lawsuits.
And, related to safety, an industrial space must meet security standards commensurate with the needs of the business. If a security system isn’t installed, this may serve as a negotiating point with a potential landlord.
Tip 5: Project Operating Costs for the Space
With residential real estate, it’s easy to fall in love with a home that doesn’t align with your financial situation. It’s the same with industrial spaces.
Rather than look at a property from an emotional perspective, businesses need to fully analyze the projected operating costs for a space, ensuring that these costs align with budgetary realities.
What fees and expenses do the tenants need to cover? What’s covered by the landlord? Will the landlord or tenant pay for upkeep and maintenance?
These are just a few of the questions that need to be asked before signing a lease.
Projecting the operating costs associated with a given industrial space can be challenging, so please drop us a note for help with this analysis.
Tip 6: Understand Clear Height
With industrial spaces, tenants must look beyond square footage to a property’s vertical availability, that is, its clear height.
If your business requires vertical storage, you need to ensure clear height supports your needs. Conversely, if you don’t need this height, make sure you’re not paying for unused vertical space.
Tip 7: Analyze Floor Load Requirements
With most retail and office space, floor loads just don’t matter (e.g. a desk or display case won’t put a floor’s structural integrity at risk).
On the other hand, industrial tenants often use heavy equipment, and the floor and slab foundation beneath a space must support this excessive weight.
Failure to analyze these requirements before moving heavy equipment into a space can lead to serious damage, disrupted operations, and potentially lawsuits.
Tip 8: Know Your Electrical Needs
Once again, this is a consideration fairly unique to industrial tenants, as they tend to have different electrical requirements than their commercial counterparts.
Specifically, industrial tenants need to ensure that both the power and voltage in a given space support their operational needs.
Tip 9: Check HVAC Support
Industrial spaces may not have HVAC support throughout the entire building (whereas this amenity is standard in office and retail spaces). As such, businesses need to assess their actual HVAC needs.
Do you plan on storing goods requiring climate-controlled environments? Will employees be working on heavy equipment in peak summer conditions? Do you use automated machinery with certain temperature operating ranges?
No uniform answer exists, but what’s important is that A) tenants assess their HVAC needs, and B) work with an HVAC technician to assess the actual capabilities of a given space to ensure they meet those needs.
Tip 10: Assess Parking Lot Capacity
A two-fold requirement exists here. First, an obvious - though often overlooked - requirement of any space is that there’s enough parking for employees and expected visitors.
Additionally, from an industrial standpoint, businesses need to ensure that a space’s parking lot supports its operational logistics requirements. Intimately related to loading capacity, a parking lot must accommodate the trucking needs of the business.
In other words, if you expect to load/unload semis at a loading dock, those same trucks must be able to actually maneuver into and out of the parking lot.
---
We recognize that, even after outlining the above information, selecting an appropriate industrial space can seem daunting.
That’s why we’re here to help. The Pocket Broker team lives and breathes commercial real estate, so drop us a note to see how we can help you achieve your unique objectives!