Unless you’re part of a huge company, chances are you’ll rent your warehouse space, not own it. And when you look for warehouse space to start storing your product, it seems like most warehouses are geared toward big businesses who need shipping and logistics automation.
If you’re a small business, this probably doesn’t describe your situation. You likely need something smaller with more flexibility. Before you pull the trigger and rent a warehouse, here are five things to consider:
The number one thing to think about is square footage. How much room do you actually need for your product? Is it feasible to stack your product? And if you don’t have access to forklifts, how much space will you need to stock everything within arms reach and at the ground level?
Another consideration with square footage is if your current amount will be suitable several months or a year down the road. It’s nice to know if you’re able to purchase more space from your landlord with short notice.
You’ll also want to check how the landlord is calculating the square footage. You only want to pay for space you’ll actually use. For example, you don’t want to pay for the walls as part of your square foot price, which, unfortunately, some property owners will try to charge you for.
Will the heat, cold, or humidity affect your product? Nothing would be worse than losing all your stock after a warm or cold front, or if you live in a particularly humid area. Many warehouse storage spaces don’t offer HVAC systems, or if they do, it’s on a renter-to-renter basis.
If it turns out you do need some sort of climate controlled storage unit, be sure to ask the landlord about the process. Some may require you to install a system yourself. Others might charge you for the installation and maintenance. It’s best to double check.
Like the square footage, trying to forecast your lease length can save you money. If you know you’ll only need the space for a few months, don’t sign on for a year. See the need for a long term commitment? Try and talk your price down because you’re guaranteeing a long term relationship with the property manager.
Most warehouses will try to negotiate a longer term, say 5-10 years. If you don’t see yourself committing to that length of time, it may be best to find a storage unit that allows for shorter terms, or even month to month renting.
Be sure to know the pricing benchmarks, as well. Cushman and Wakefield, a commercial real estate firm, estimates the average rental price was $6.11 per square foot. However, that estimate changed depending on the region. Prices were at $5.17 in the Northeast, $4.75 in the South, $4.54 in the Midwest, and $9.28 in the West.
Another key consideration is the accessibility of your warehouse storage space. You’ll often be told that your warehouse should accommodate the parking of an 18 wheeler truck. If you’re a small business, chances are you won’t be working with trucking companies to haul your goods. Instead, focus on the room you need. Do you only need parking? Will you need back a van or truck up to the space? Would you like somewhere you can pull in to avoid the cold?
Another question of accessibility is whether or not you plan to work out of the warehouse. Do you anticipate working in the warehouse for a few hours each week? You might consider adding more space. Will it only be to store excess product? Then don’t buy extra square footage.
Lastly, you’ll want to consider who pays for what. If you plan to use the space or use an HVAC, who pays for the electricity? Furthermore, if you’re going to use electric in your space, is the building equipped to handle your needs?
You also want to consider the operating and maintenance costs. Industrial rentals aren’t like residential rentals. The landlord doesn’t automatically pay the taxes or for maintenance. Before signing the lease, make sure you know your responsibilities.
Warehouse Storage on Neighbor
If you read through this article and thought, wow, warehouse storage seems like a chore to figure out, you’re not wrong. We’ve simplified the process at Neighbor. Here’s how:
Square footage: Instead of following industry sizing standards, Neighbor hosts put up the space they have, in all shapes and sizes. You can find the size you need without having to negotiate with a property owner. Plus, Neighbor hosts won’t try charging you the walls.
Lease Length: A 5-10 year lease feels way too long. Even a 2-3 year lease is probably outside the reach of your forecasting comfort. With Neighbor, you rent month to month. If your business suddenly grows and you need a new space, you don’t have to worry about canceling a lease.
Neighbor is also significantly more affordable than most warehouse storage. Instead of $6 a square foot, our hosts rent their space as low as $1 or $2 dollars a square foot.
Accessibility and Bills: Because you’re renting from a private owner and not a business, it’s much easier to work out a relationship that suits both parties. Together, you can establish your own system including how often you can access the warehouse, working out of the space, who takes care of what maintenance, and more.
In short, you’ll find a better-suited space at a better price and with less leasing headaches when you rent with Neighbor. Try it out!