Leasing a warehouse can be a valuable and useful endeavor in commercial real estate development, distribution warehouse space, and for extra storage space. Overall, the industry for storage space and leasing a warehouse in the U.S. is worth an estimated $26 billion. Investment in commercial warehouse development has only been on the rise in recent years, too, with a lot of it coming in the form of what’s known as speculative building. In fact, approximately 62% of the 59 million square feet under construction by the end of the third quarter in 2013 was being constructed without signed tenants.
If you’re considering grabbing up one of these unclaimed pieces of commercial warehousing, there are a few things you’re going to want to keep in mind. Here are three tips for leasing a warehouse everyone thinking about doing so should consider.
- Know What You Need: Rule number one when it comes to committing to a big expense like this is to know exactly what it is you need and how much you’re willing to spend to get there. Establishing these guidelines beforehand will help you prevent “reaching” for a piece of property that you either can’t afford or won’t be able to utilize properly for your needs. While it’s important not to go overboard when leasing a warehouse, it’s usually a good idea to go slightly larger than what you expect to need. This strategy will cover you in case your estimations were low. Plus, you’ll have room to grow/expand.
- Watch the Market:Unless you’re in desperate need of leasing a warehouse tomorrow, it’s a good idea to monitor the market before jumping into anything. Value can fluctuate drastically depending on things like the time of year and external demand. If you find a good deal, though, don’t wait too long. Typically, the demand for storage/warehouse space will only go up. Currently, the demand for storage space has an average annual growth rate of just over 7%. If you wait too long, you might miss out on a great opportunity.
- Location, Location, Location: As with any aspect of real estate, location needs to be a significant consideration when it comes to leasing a warehouse. Not only can this impact the overall value of the space in question, but it can also affect things like distribution and shipping costs and the people you have to deal with as business neighbors every day.
Keep these things in mind if you plan on leasing a warehouse in the future to help guide you to success.