Since the early 2000’s when the e-commerce distribution model became commonplace, commercial warehousing has become a necessity for any successful business. Since 2006, that demand has only been growing, with a record 70.2 million square feet of office space having been absorbed by US markets in 2014. But leasing a warehouse can be a daunting task. Here are a few success factors to consider:
1. What will be the primary purpose of the warehouse? Is this simply a storage operation, or will you need manufacturing warehouse space? Do you need special accommodations, such as climate control, personnel facilities or a certain amount of lateral clearance?
2. Estimate your space requirements. Once you know how the warehouse will be used, you can estimate the footprint of each part of your operation. Remember to consider your projected growth when determining warehouse space needs. Over the next five years, both online and offline retailers will need an additional 25 million square meters of combined space in order to store and handle merchandise associated with increased demand for products and services.
3. Understand your rights and responsibilities. Renting commercial real estate is different from leasing residential property, and fixing that leaky roof may actually be your responsibility, not your landlord’s. When leasing a warehouse, be sure to have a comprehensive understanding of the facilities and maintenance that are the landlord’s responsibilities and those that will fall on you.
4. Consider your supply chain. Is the warehouse in a location that is convenient to your major distribution arteries? For example, if leasing a warehouse in central Florida, you’ll probably want to make sure that the distribution warehouse space is located with convenient access to the major ports in Tampa.
5. Insure yourself and your equipment. Commercial leases do not generally cover losses associated with equipment, nor do they cover personal injury for any accidents that may occur on the premises. When leasing a warehouse, be sure to contact your insurance provider and protect yourself from unexpected mishaps.
The good news is, there’s plenty of industrial warehouse space available! From 1990 to 2003, the boom years of e-commerce, four billion feet of warehouse space was built to accommodate growing needs in warehousing and distribution. Before leasing commercial property, make sure you understand your needs, factor in your expected growth, and have a clear understanding of your rights and responsibilities under the lease. This will help take the guess-work out of finding a warehouse to rent.