10 Things to Consider When Leasing Warehouse Space

No matter what type of commercial real estate you’re looking to lease, there are a lot of factors to analyze. Warehouse space is no exception. Finding the right warehouse property is an important decision that can significantly impact the future of the company. From understanding lease terms to evaluating features like size, sprinkler systems, parking, and security, there are many important things to consider when leasing warehouse space.

The essential features of warehouses include having the right capacity to store goods efficiently, adequate loading options, enough parking, and good access to highways, interstates, and transportation hubs. But more than just being the ideal size in the right location, the perfect warehouse for your business will fit your specific needs for efficient operations, making the best use of the space.

Many modern warehouses are equipped with newer features such as ESFR sprinkler systems, high-tech security, and even newer advanced warehouse technology. When choosing a space, you’ll also want to make an informed decision based on not just the current needs of the company, but any growth or changes that might be anticipated in the near future.

Leasing a property isn’t a simple decision, and finding the best warehouse for your company’s needs can take time and careful consideration.

At Regent Commercial Real Estate, our team is deeply acquainted with the ins and outs of the warehouse leasing process. With a network of resources in the Charlotte metro area and comprehensive search database tools, we’re here to help you find your perfect space and make the transition as seamless as possible.

Leasing Warehouse Space: 10 Important Things to Consider

Here are 10 important features that you shouldn’t skip over when evaluating a potential warehouse space:

1. Cost and lease terms
2. Size and layout
3. Zoning
4. Proximity and highway access
5. Loading capabilities
6. Warehouse infrastructure
7. Parking capacity
8. Security features
9. Technology
10. Office space

1. Cost and Lease Terms

When you’re choosing a warehouse, cost is an obvious factor. But the first number you see doesn’t always provide a clear picture of the overall cost of the building. There are a lot of factors that play into figuring out whether a warehouse space is cost effective for your business.

In the greater Charlotte area, average rental rates for warehouses run around $13/sf/yr. But in addition to the monthly rent, you should also consider additional costs such as the security deposit, property taxes, maintenance fees, insurance, and utilities.

Lease terms, such as renewal options, early termination, subletting, tenant improvements, and the length of the lease term also play an important role in determining whether the lease agreement will be beneficial to your long-term business goals.

When navigating commercial leases, having an experienced tenant representative on your team can save you thousands – without costing any extra on the front end. Tenant representatives provide expert advice throughout the leasing process – giving insight on market conditions, delivering expert negotiation, and giving you peace of mind when it comes to understanding the fine print of your warehouse lease.

2. Size and Layout

The square footage of the building is a vital factor when considering potential warehouse spaces. But the overall number of square feet is just part of the equation. More than just storage space, consider the layout of the building and whether it provides what you need in terms of forklift access, large equipment storage, clear height, and loading configurations.

In addition, think about the future needs of the business and whether expansion is an option. Is the building scalable – both in terms of storage facilities and infrastructure? Warehouse leasing can be a long-term commitment. Thinking through possible expansions and future growth before locking into a lease can save a lot of hassle down the road.

Related reading: How Much Warehouse Space Do I Need?

3. Zoning

For industrial property, zoning is classified as either light industrial or heavy industrial. While light industrial is reserved for lighter usage, heavy industrial zoning is typically occupied by businesses who create more air and noise pollution.

Since warehouses are mostly utilized as a place for products to sit, most warehouse businesses can use either type of zoning. Still, it’s a good idea to make sure the current zoning for any commercial property will work for your business needs. A zoning change is a long, expensive process that isn’t always effective, so looking into zoning requirements before locking into a lease is the best way to prevent future headaches.

4. Proximity and Highway Access 

Proximity to interstates, transportation ports, and inland transportation hubs can make a huge impact on overall transportation costs and the efficiency of business operations. Close proximity to major hubs means a streamlined supply chain, quicker deliveries, and lower overall transportation fees.

More than just offering easy access to major highways and ports, think about the regions where the majority of your customers are located, and how much (if at all) a new facility will affect your shipping and lead times.

5. Loading Capabilities

Make sure the space works for you both in terms of indoor and outdoor loading capabilities. Inside, is there enough room for forklifts and any other equipment you use to move products around? Does the floor load capacity of the space fit your needs? Outside, are there adequate loading docks for efficiently moving product in and out?

6. Warehouse Infrastructure

In addition to features such as ceiling height and floor load capacity, you’ll also want to consider other warehouse infrastructure such as sprinkler systems, electrical power, lighting, and heating and air conditioning (HVAC systems). Do the opportunities provided by the building fit the specific requirements you need in order to make business operations functional and efficient?

7. Parking Capacity

How big of a parking area do you need? Consider trucks going in and out, any space needed for excess trailer parking, and parking for employees.

While warehouse parking lots tend to be smaller than parking lots for a distribution center, it’s important to make sure you have an adequate amount of space for vehicle parking, maneuvering of trucks and other large equipment, and any storage area needed for waste, pallets, and other empty containers. On the other hand, too much space will result in paying more than you might need to. More isn’t always better!

8. Security Features

Security is paramount in all types of warehouse spaces. More than just sprinkler systems and fire escapes, consider security measures that will protect both your products and your employees.

Surveillance cameras, adequate indoor and outdoor lighting, alarm systems, and exterior fences can all be significant protective measures in making sure the workplace is safe from intruders.

9. Technology

Warehouse technology options are continuing to advance, and they can go a long way in maximizing efficiency across a range of warehouse tasks.

Advanced inventory management systems (IMS), automated storage and retrieval systems (ASRS), WMS software, automatic disinfection systems, and RFID tracking are all worth looking into when considering an available space and whether it aligns with your business goals and requirements.

10. Office Space

Lastly, consider whether you’ll need a desk or private office space for administrative responsibilities, company meetings, or data storage.

The office needs of a warehouse can fluctuate considerably depending on the business model. However, most warehouse and distribution centers have few daily employees and only need about 10% or less of the space for office needs.