Start Your Search Early
If you are a tenant reading this, it is critical that you start your search for your next industrial warehouse early. Please do not wait until you have one month to move out of your current building. It is important you start immediately! Why do I find this so important? There are a variety of reasons to why you should start your search early including finding the right property for your use, competition, and the amount of time it takes to negotiate and review Leases. Let’s start with finding the right property.
Finding the Right Property
Depending on your business and use, it will take some time to find the right property that fits. If you are looking to lease or buy a warehouse as of the date this was written (December 11, 2018), then you have probably seen that there are not many warehouses available for lease due to the low vacancy rate and high demand for industrial product. Chances are if you have found a building in your size range, it probably does not fit other requirements you have (power, clear height, offices, dock positions, etc.). For example, if you are a logistics company, besides size, you are looking for a building with multiple dock positions, minimal office, and good clear height (typically 24’ minimum).
One of the more rare properties to find in the LA MidCounties area are warehouses in the 3,000 sq. ft. to 10,000 sq. ft. range that are freestanding with a private fenced yard. This is a type of property that does not come on the market often, and when it does, it does not last for long. What is the solution? The solution is to have your broker start your search early and when you find that golden property, you jump on it!
Competition for industrial warehouses is fierce right now. Landlords are receiving multiple offers on their properties. This has caused properties to be Leased extremely fast. When you start your search early, you are able to see new buildings that come on the market. This gives you more time to analyze and act on them. When you wait till the last minute to search, it is more than likely that the properties you are looking at have significant activity.
What are some ways to stand out from the competition? Firstly, making a strong offer to the Landlord is key. Presenting an offer that is near their asking price and with minimal tenant improvements will definitely spark interest in a Landlord. Secondly, always submit your financial statements with your offer. The Landlord will not make a decision until they see your financial statements, so make sure you submit them right away. Lastly, providing additional information to the Landlord such as company history, number of employees, landlord references, current location, etc. will put you in the best light.
Negotiations and Lease Review
The last reason why you shouldn’t wait till the last minute to start your search is because of the length of time that is required to negotiate offers and review Leases. Most deals don’t happen in one week. It takes time to negotiate offers and counter-offers. Once you have come to terms, you go Leases, which takes careful analysis. Long story short, negotiations and Lease review take time and you don’t want to rush through them. If you do rush, you may end up with a deal that is not favorable for you.
Please start your search right away if you know you are going to move out of your current warehouse at the end of your Lease Term. You want to be able to secure a property before your Lease is up, that way you are not stuck paying holdover rent!
If you are looking for industrial warehouse space in the Los Angeles MidCounties area, please feel free to contact me at anytime. I would love to help you in your search or answer any questions you may have.
Industrial Real Estate Broker
Inco Commercial Brokerage
La Mirada, CA