Understanding that your industrial real estate agent is contractually obligated to represent your best interests is one thing, but giving him or her all of the tools necessary to make that happen can be another. The best way to ensure your agent can do the job properly is by being completely straightforward and honest in all aspects. In particular, here are five truths to disclose to your agent during the industrial real estate lease process.
Your Desired Term Length
In the hot industrial market here in northern Nevada, landlords are requiring minimum terms of three to five years. If you absolutely have a need for something under than term length, your agent needs to know so that he or she can narrow down the possibilities. Spoiler alert: you’re not going to have a lot of options from which to choose.
Your Financial Status
Most landlords require prospective tenants to submit financials right along with an LOI (offer to lease). If your company is a start-up and/or has a less-than-reassuring financial status, you might be required to give a personal guarantee or be open to providing a hefty security deposit to secure your desired space. Whatever the situation, your agent needs to know all about it from the start. That way, he or she is in a better position to negotiate on your behalf. Being upfront and honest about your situation is better than backtracking down the line.
Your Plans for Use
This is a big one. Don’t be vague. At Miller Industrial Properties, we often get calls from tenants who do light manufacturing, which is usually considered an acceptable use by most property owners. However, if the tenant does not disclose the intent to install a paint booth in the space until the ninth hour, that’s a recipe for trouble. Being direct and clear about your operations is the best way to go. In fact, if it’s possible, consider sending your agent photos of your existing operations (or invite them to visit the site), so that they can get a better understanding of your needs.
Your True Timing/E.T.A.
On larger industrial leases, negotiations can take months – not weeks. If you have a true time constraint, your agent needs to know right away so that the proper urgency is applied. We recommend initiating your search at least six months at the very short end before your operational move-in deadline.
Your Plans for Tenant Improvements
It may seem difficult to predict all your tenant improvement needs right off the bat, but it’s a best practice to diligently compile a list of tenant improvements with your agent prior to submitting an LOI. Once the landlord has agreed to terms and requests, he won’t want to renegotiate. It is a waste of everybody’s time. If you are not available to complete a detailed walk-thru of a space, hire a knowledgeable agent who can do it and compile a list of TI’s for your approval. Again, it would be helpful to send photos or have your agent visit your existing operations in order to complete this list.
The best strategy is always, always transparency with your industrial agent. Only by understanding any potential obstacles can your agent create a plan to manage them. It’s really the smartest way to ensure the smoothest transaction. For more information about industrial real estate in northern Nevada, contact Miller Industrial Properties today.
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