Looking to lease out industrial real estate but aren’t sure how to go about it?
In the industrial sector, companies need to consider several factors when picking a space to lease; these include the amount of parking space available, accessibility to roads and proximity to suppliers/vendors.
Here are the most crucial factors that companies need to consider when leading an industrial space:
1. The Condition of the Property
Usually, in industrial leases, tenants lease industrial spaces under a “triple net lease”. In such leases, the tenant is responsible for property taxes, insurance, and maintenance.
Because the tenant will be paying most of the maintenance costs, they must assess the condition of the structure before they sign the lease. When the structure is in a poor state, the tenant can get stuck with unnecessary expenses.
Before signing the lease, the tenant will have to examine the condition of ventilation, roofing, plumbing and electrical systems to ensure that the property is worth the money.
Unless the landlord is willing to fix them before you sign the lease, it’s best to steer clear of such places. Facilities that require lots of renovation and repairs can prove to be very expensive in the long run.
2. Proximity to Suppliers, Vendors, and Customers
Sometimes, it helps to be close to your competitors—other times, it can be risky. When considering a location, take a look at the surroundings to see how easy it is for suppliers, vendors and customers to find you.
Companies in the industrial sector need to ensure that their facility is accessible by those delivering raw material and picking up finished goods. A bad location can force suppliers, and customers to look elsewhere.
3. Assess Potential Risks
Natural disasters like hurricanes, tornadoes, and earthquakes can cause immense damage to factories carrying expensive equipment and warehouses stocking cartons of finished goods.
When choosing an industrial space, make sure the location you’re looking at isn’t in a flood zone and isn’t prone to wind. All companies in the industrial sector should purchase insurance policies that protect their assets from unforeseen circumstances.
4. The Lease Agreement
There is a huge difference between a lease for commercial space and a lease for industrial space. Because industrial locations are more prone to wear and tear, the tenant has to bear most of the costs.
Tenants of industrial spaces are expected to pay for maintenance, repairs, property taxes and building insurance as well.
Ask your commercial real estate broker to examine your lease agreement thoroughly before signing it. Real estate agents can point out issues and make sure you’re getting a good deal.
Macomb Commercial Real Estate
Macomb Commercial Real Estate can help you find industrial properties that meet the needs of your businesses