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Some Important Things to Consider About Industrial Leasing

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Industrial leasing refers to leasing an industrial area or complex; this may mean a production facility, warehouse, and the like. Leasing this type of facility is often very different than leasing an office, as it may be larger, will need different forms of insurance to cover the work you'll be doing in the space, and so on. If you're considering leasing an industrial space, note a few important things to consider about the lease itself. This will ensure you don't overlook anything about the arrangement and have no surprises down the road.

1. Note if the lease has a "make good" clause

The term "make good" refers to your obligations to return the facility to its original state or to at least exercise good faith when it comes to cleaning the facility, making needed repairs, and so on. The clause, however it is worded, may require you to remove equipment that you have installed in the facility, replace anything you removed such as garage doors or conveyors, and so on. Be sure you check if your lease would have this type of clause and consider what would be involved in modifying the location and then returning it to its original state if you were to leave at the end of your lease.

2. Look for a tenant improvement allowance

An industrial facility will usually need to undergo some changes when you move in so that it accommodates your needs. These changes may include adding shelving for the warehouse space or a conveyor from the delivery area to the warehouse, converting a part of the facility into an office for clerical staff, marking the parking lot for delivery trucks, and so on. A landlord will usually have a tenant improvement allowance, which means they will spend a certain amount of money to make those changes, but you would then be liable for any costs over and above this allowance.

3. Check on limitations or restrictions

Your lease may restrict you from using certain hazardous materials on the site, from subleasing, or from installing certain types of equipment. There may even be noise restrictions or limitations as to the hours you can have trucks moving in and out of the property. These limitations and restrictions could affect your business and how you intend on running it, so check on these with a lease and consider if you can have them adjusted. If not, you may need to find a different location that is more accommodating.

Keep these tips in mind as you consider leasing an industrial development in your area, and you'll be able to find the right property for your needs.