I’m a “newbie” in real estate and I want to know what’s important to know about leasing or buying a space for my business: What’s most important?
Realistic expectations: doing proper market research in order to develop realistic expectations. Don’t waste time in the search for something that does not exist.
We have tenants who come to us to rent office spaces and warehouses in the Chicago land area from all walks of life. In our experience, the one thing that is common among successful small business owners is a realistic sense of expectation.
“Everyone wants a 1000 square foot warehouse with its own truck docks, these are things that do not exist ..”
An individual came to us last month wanting to rent large warehouse space on a month to month basis at 50% of the asking rent. This was an un-realistic expectation. This is because our published asking rates have been carefully researched based on current rents in the marketplace. If we were to lower the rents in one space to accommodate a tenant, we would face an onslaught of requests from every business that currently rents our units. The fact that a space is vacant is immaterial to a landlord in the grand scheme of things.
“But I will only be in there for a few months, because I am in the process of expanding my business, I already have something bigger lined up..”
An individual came to us last month wanting to rent large warehouse space on a month to month basis at 50% of the asking rent. This was an un-realistic expectation. This is because our published asking rates have been carefully researched based on current rents in the marketplace. If we were to lower the rents in one space to accommodate a tenant, we would face an onslaught of requests from every business that currently rents our units. People with little knowledge of this business assume that just because a space has been vacant for some time a landlord will risk having a tenant who may cost thousands in eviction fees and who may cause significant damage repair costs to the property.
“Everyone wants an office with a view of banff ..”
Another potential tenant came to us a few months ago looking for a small office spaces for his non for profit. He was undecided at first and met with us four or five times. In the end he decided that the view is not good enough. If you are a small business owner you need to first study the market and realize what the going rates are for offices and warehouses and what exists, and what does not. If you want an office with a skyline view you can rent in a high rise in downtown Chicago and pay three or four times the rental of a suburban office.
“But if I keep looking harder, I know I will find the perfect warehouse space..”
This is a common mistake, finding a unicorn space for lease is harder than finding a needle in a haystack. If in actuality, it does exist, it is already taken. In any leasing of an office or warehouse space, you are always going to sacrifice something, because nothing can be 100% perfect. You will always have to compromise either in budget, convenience, facilities or terms in order to make the deal.
The best advice we can give you as a small buisness owner looking to grow professionally is that you need to take an honest look at your expenses and your budget and develop realisitc expectations well before going out into the market and hunting for a place to set up shop. This will save you a lot of time and potential landlords time as well.