A Comprehensive Guide to Finding Industrial Space for Rent
Thinking about leasing industrial space for your business? If so, you’re not alone. The demand for industrial space for rent in Calgary is on the rise and there isn’t enough supply to meet it. As a result, we’ve seen an increase in the number of leases that are ending, renewals on existing leases being declined, and landlords raising rents. This is also why there are very few good options when it comes to leasing industrial spaces. If you’re interested in finding industrial spaces for rent, this blog post will get you started. It covers everything from common types of lease structures to considerations when selecting an industrial space. The advice here will make your search for a new industrial space easier and help ensure that you find exactly what you need when the time comes to sign on the dotted line.
What is an Industrial Lease?
Before you begin your search, it’s important to understand the different types of leasing arrangements when it comes to industrial properties. The most common lease types are as follows: – Net-net lease: This type of lease is where you’re responsible for all of the expenses related to the property. These can include taxes, insurance, maintenance, repairs, and utility bills. While these types of leases are rare, they can be found from time to time. You’ll also see net-net lease structures in retail spaces. – Gross lease: This is the most common type of lease and is what most industrial leases fall under. This type of lease is where the landlord pays for all of the expenses related to the property. – Operating lease: This type of lease is where the tenant pays for the expenses related to the property and then the landlord receives a percentage of those costs once the lease is over.
Types of Industrial Leases
New Lease: If you’re leasing a new industrial space, you’ll likely end up signing a new lease. If so, you can expect an initial term of between five to 10 years. There may also be a “option to buy” clause tacked on to the end of the lease. If you’re signing a new lease that has an “option to buy” clause, you have a set amount of time (typically six months) to exercise that option and buy the property. Existing Lease: If you’re leasing an industrial space that’s currently occupied, you’ll likely be signing an existing lease. If so, you’ll want to confirm the following: – How long the lease runs. – The amount of rent. – The date of the next rent increase. – Any lease terms and conditions that might apply. – Any options to extend the lease.
Important terms to know when leasing industrial space
– Base Rent: This is the amount of money due each month under the terms of your lease. – Escalation Clauses: These are built-in increases in your base rent. They can be due to changes in energy costs or other external factors. – Security Deposit: This is the amount of money you’ll need to put down at the time of signing the lease to secure the space. Typically, you have one to two months to come up with the security deposit. – Signing Bonus: This is an amount of money that the landlord will give you at the time of signing the lease. It is often used to offset the security deposit. – Rent Increases: Early in the lease terms (typically in the first year), landlords will have the option to increase your rent. This can happen if energy costs increase or if there are other external factors in the area that affect your rent. – Option to Extend: This clause is common in gross leases. It allows you (the tenant) to extend the lease by a set period of time.
How to find the right industrial space for your business
When it comes to finding the right industrial space for your business, you want to consider the following:
- Location – This will determine how close you are to your client base and shipping routes.
- Size – You want to make sure that you have enough space to house your production equipment, storage space for finished products, and workroom/offices for your staff.
- Utilities – You want to make sure that your industrial space comes with utilities that are reliable and affordable.
- Accessibility – You want to make sure that your industrial space is accessible. You’ll want to confirm that it’s close to major highways, railroads, and airports.
- Environmental Issues – Some industrial spaces are in areas that are prone to flooding or other environmental issues. You’ll want to confirm that your space is safe and protected from these potential disasters.
Why lease when you can buy?
Leasing industrial space is often the smarter option for small businesses. The following are some of the reasons why:
- Your cash flow. If you’re leasing industrial space, you can often get a shorter lease term. This will allow you to get into the space faster while giving you more time to save up and buy.
- Flexibility. Industrial leases are typically short-term and come with easy exit clauses. This gives you the freedom to expand or downsize your space as needed.
- Building and maintenance issues. Some industrial properties have questionable wiring, plumbing, and other structural issues. If you buy a property, you’ll have to deal with those issues and may have to fork out large amounts of money for repairs.
What to Look for in a Great Industrial Space
Now that you know what to look for in a great industrial space, here are some key features to focus on:
- Space: The first thing you’ll want to confirm is that the space has enough room for your needs. There may be limitations on the number of square feet that each tenant is allowed.
- Location: The next thing you’ll want to confirm is that the industrial space is located in a good area. You want to make sure that it’s in an area that is safe and accessible.
- Utilities: Utilities are another important factor to consider. You’ll want to confirm that you have enough power to run your equipment and that the water is clean and reliable.
- Power and water availability: You want to make sure that you have enough power to run your equipment and that the water is clean and reliable. – Traffic: You want to confirm that the industrial space is located in an area that has low congestion and easy access.
- Security: You also want to make sure that the industrial space has the latest in security measures in place. This will help keep you and your products safe.
- Zoning: Finally, you want to confirm that the industrial space is located in an area that is zoned for industrial uses. You don’t want to sign a lease and then find out there is something wrong with the zoning.