If your business has been growing exponentially and your current facility is hindering your company’s growth, it’s probably time to consider a new space. When searching for your next business location, there’s always more to consider than meets the eye.
Timing — Give yourself plenty of time to search and understand what is and isn’t available in your desired market, ideally a minimum of six months before your lease expires. That may seem like plenty of time, but know that tenant improvements (offices, etc.) can take upwards of 120 days to design and complete.
It's never too early to weigh your options in the market. Do yourself and your business a favor, and keep in touch with industry sales and leasing professionals to keep your pulse on what’s going on in the marketplace. Information is free, and you just might learn something that determines when you should move.
Representation — Working with the right professional can make all the difference. In your search for industrial space, find an industrial specialist to represent you who seeks to know your business and geography needs. Certain building projects and listings aren’t available on the normal search websites available to consumers and realtors.
An industry professional who works specifically in the marketplace that you are searching in will find you the real opportunities and save you thousands when it comes time to choose that new location. Make sure you work with someone that adds value to your endeavor. It would be strange to hire an industrial agent to help you find a house. It is equally strange to have a residential agent represent you in finding a manufacturing facility.
Pre-qualification — There are many products available to you that can help you get into that building of your dreams. If you are considering a purchase or a lease, sellers and landlords alike will want to see the last two to three years of tax returns, to make sure you are a reliable tenant or dependable owner.
Small Business Administration offers a 10 percent down loan program through most of the major banks so that you can save more operating capital for your business. It never hurts to have your finances in order, so you can be ready to strike at the right deal.
Location — You may have found the best building for the money, but what if you lose half of your workforce because it is "locationally challenged." Think about where you’re drawing your employment base from, best delivery routes, and accessibility when considering your new space.
Building specifications — Each building has its own unique features and benefits, such as zoning, occupancy rating, power requirements, loading, clear height, parking, etc., so it’s important you're aware of what your business needs are to operate effectively and legally in your new space.
Read the lease, or purchase and sale agreement — Ever wonder why a lease document or purchase and sale agreement is on average 20 pages? There are a lot of moving parts and potential pitfalls you can encounter as a lessee or a buyer. It's critical to have a legally binding document reviewed by counsel that specializes in real estate contract law. Every location, landlord, and seller handles leasing according to their own best practices. Make sure you're okay with their lease, or purchase and sale agreement, or you'll find yourself working on your lease instead of your business.
Finding the right industrial space is complicated. A good sales or leasing professional can be a conduit of extremely useful information. Start with a good team of professionals, and they'll save you time, money, and most importantly, sanity.
Article written by Mike Ciosek & Eric Bell of Kidder Mathews and published in the Phoenix Business Journal May 22, 2018