Three, Six, Ten Months?
First, it’s necessary to clarify that a tenant should absolutely have a professional overseeing his real estate needs. Now, I wish I could advise you to begin your search for the right space three, six or ten months in advance of your need. But that number varies dramatically from one tenant to the next, which is where the value of that professional mentioned above comes in handy!
Consider these common situations.
1. Your business is growing, and you need a larger space the second your lease is up. But there’s still time to spare, so your best option is waiting it out for now and getting the space you need when your lease expires.
Without an agent, that is a safe plan. But you might be surprised to learn you really do have options today – options your experienced agent would be able to quickly outline. I can think of three different avenues that would allow you to move your business into that larger space quickly, if not right away, while shedding that current lease obligation.
2. Your business is shrinking. Sometimes, you really do need less space and the reduced overhead that comes with it. But since you’re stuck in your current lease, so you’ll limp along until it expires.
Again, this is a prime reason to call your agent. There are two solid plans that I can put in place to reduce your overhead and get you into a space that’s appropriately sized for your new needs.
If you’re entering the market for the first time, lead time will again vary based on your needs. Current market conditions will also influence timelines. For example, if you have basic needs in a balanced market, lead time may be as short as a few months before you can move in. Even so, available vacancy in the size range you’re considering can vary significantly.
Budget constraints can likewise limit your options, which means your timing to secure a location may be extended. Sometimes, new tenants need specific features that can make the searching more challenging – extra wide drive-in doors, truck docks on very small warehouses, rail to the building, yards, high amounts of power, etc. And while nearly everything can be accommodated sooner or later, timing is everything. If this is ringing alarm bells for you, engage your real estate professional sooner rather than later. It’s never too early to take advantage of the services of a real estate professional.
That’s likewise true if you’re a candidate for a lease renewal. There are many strategic advantages you enjoy when you have the luxury of time in the renewal process. Remember this – as time shortens, so does your negotiating power.
There are a handle of surefire ways to secure the very best renewal rates and terms. The sooner your agent can begin, the more of these methods he can employ. If you wait until the landlord offers a renewal rate, your agent is effectively coming up to bat for you with one strike. At this point, your landlord has a slight upper hand in the negotiation. And if you’ve been in communication with the landlord’s agent already, this may be another tick against you.
So when is the best time to begin looking for industrial real estate? I’m afraid I can’t say. But I will advise this – as soon as you decide you need more space, less space, a new location, or a renewal, your next step should involve your agent.