warehouse for saleWhat Atkins CRE Takes Into Account Before Signing a Lease

When it comes to renting business properties, some needs require a more industrial setting for their operations. Leasing a warehouse can be a solution for those needs involving storage, manufacturing or distribution, the demand of which, has risen dramatically in recent years.

Having an idea of what your business will need in order to run smoothly, as well as knowing what to look for beforehand will save you a lot of time, money and frustration. Here are eight common things to look for when renting a warehouse.

Accessibility and Parking

No matter the business you plan to run, whether it is storage, distribution or some form of manufacturing, you, or someone else, will need to be able to easily access the building with a myriad of vehicles. For storage, an average parking lot may be sufficient, as you will mostly be dealing with customers’ vehicles, the largest of which may be a moving van or box truck. For distribution and manufacturing, however, there will need to be enough room to maneuver a semi, as well as any loading and unloading equipment.

Zoning Regulations

Most properties have restrictions set on them by the city, especially when it comes to unconventional use. Will the zoning for a particular property allow for your intended use?

Electricity and Power. Knowing whether a property has electricity may seem obvious, but knowing whether a property has power sufficient for your business’ needs is an important factor. For example, those looking to enter into manufacturing will need to know whether or not 3-phase power will be available, as much of their equipment will run off of it. Having the building evaluated by an electrician or an electrical engineer will tell you how much power you will have available to you, and whether or not it will be enough.

Maintenance and Operating Expenses

Both you and the landlord will be responsible for different expenses. Most often, industrial spaces like warehouses will require you to pay for a portion of things like taxes, insurance and property upkeep. Be sure to review the lease and talk with the landlord in order to figure out exactly what each of you will be responsible for. Additionally, ensure that everything you will be paying for are things you actually should be paying for, as things like parking lot maintenance typically is up to the landlord.

Usable Space/Square Footage

The size of a warehouse is certainly a deciding factor when choosing which one to lease, however, different landlords may use different methods in order to calculate it. This can range from measuring outside the walls, to inside the walls, to approximating from blueprints, and doesn’t always take unusable space into account, such as space filled with utility equipment. Ideally, you only want to pay for the space that you will be using, so working that out with the landlord should be part of the consideration in no signing a lease

Floor Load Limitations

Storage, distribution and manufacturing all require some form of heavy equipment, and flooring can only handle so much weight. Determine the weight of the equipment you’ll be using and compare it to the load limitations of the floor of the warehouse, the value of which should be available through the landlord.

HVAC

Typically, warehouses won’t come with HVAC units pre-installed, and if they do, the unit was likely left there by a previous tenant. To avoid the potential problems of a neglected HVAC system, negotiate an HVAC maintenance contract with the landlord on the condition they have it inspected and repaired first.

Expansion Options

If you want to be able to expand your business later on, you will first need to have the option to do so. In addition to this, speak with the landlord to find out if any other tenants have the option to expand, and to where. If another tenant has the option to expand into the space you’ll be leasing, negotiate to have the landlord move you at no expense, should the need arise.

Warehouse for Sale Orlando

The Advantages of Buying a Warehouse for Sale Through Atkins CRE

When it comes to your business’ future, one of the largest and most impactful decisions you can make is buying versus leasing of your industrial property. Although leasing a warehouse is an ideal option for those who may not yet have the capital to purchase a property outright, it might not always be the best long-term choice.

To help you make a more informed decision about purchasing a warehouse for sale in Orlando, Florida, we are here to explain what you need to know and compare buying versus leasing. 

 

What Needs to Be Considered When Considering Buying versus Leasing Warehouse Property

 
  1. Capital Requirements of Buying. Even if you have the capital available to purchase a property, it is important to remember once committed to a purchase this amount of cash will no longer be available to meet other needs of your business. So, an economically sound business plan must be devised so that you do not have hindered progress or growth. If leasing, less capital is used up and can be put to other uses to grow your product line and increase business development.
  2. What Costs Are Associated with a Purchase Over a Lease. If you prefer to fix your occupancy cost, purchasing a property helps achieve that goal. When you purchase a property, you pay cash or get a commercial property loan that will fix costs of the property over a known period of time.

Lease payments are a deductible business expense, while a mortgage payment is likely not fully deductible. Generally, the payment that is attributed to principal reduction is not tax deductible. However, that can be somewhat offset by the depreciation deduction available on a purchase property (that is not available on a leased property). You need to consult your tax advisor to determine the true impacts of this variable on your business and tax plans.

 

The Advantages of Purchasing a Commercial Property Like a Warehouse

 
  1. You Will Have Great Stability. When purchasing a commercial property like a warehouse for your business, this leaves you, your brand, and your employees with a sense of security. This is because it is less likely that your business will make a sudden and drastic move from one property to another.
  2. More Flexibility With Property Improvement/Layout. You will be free to do what you would like with the property including maintenance, improvements, and cosmetic fit-outs such as permanent and semi-permanent solutions. Unfortunately, with leasing, you must return the property to the owners in the same or better condition than what you received it in while removing all semi-permanent structures.
  3. Build Equity In The Property. Despite the fact that your capital gets tied up in purchasing the property, the payoff ends up being that your property builds equity. If you are planning on purchasing a warehouse, the land and improvements should be appreciating in value. You could eventually sell the property for a profit. Leasing, on the other hand, keeps your capital in your business but you won’t increase the value of the business through the land it sits on.

Owning a property may be a smart move for your business if you are looking to give yourself and your employees’ stability and produce greater economic opportunities while creating value within the property in the future. Beyond this, you will avoid inconveniences like leasing restrictions and forced moves.

If you are looking to purchase a warehouse in Orlando, Florida, call Atkins CRE today.

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