1400 Gables Ct #103 Plano, TX 75075
5601 Bridge Street, #300, Ft. Worth, TX 76112

Dallas Business Lawyer Gives a Whirlwind Tour of Warehouse Leases

Dallas business law attorney, Richard “Ric” Armstrong, discusses what business owners should know before signing a warehouse lease.

Choosing warehouse space to store your inventory can be one of the most critical decisions you make as a small business owner, especially when it comes to the lease. Warehouse leases work a bit differently than other types of commercial leases, and because many variables come into play, there is no “standard” set of provisions when it comes to renting warehouse space. Before you get locked into a binding agreement, here’s what you need to consider.

What Does the Rent Cover?

Of course you want to spend as little as possible on warehouse space, but don’t get lured in by low rent alone—find out what the rent actually covers and what type of lease you are signing. With a gross lease, for example, the cost of services, taxes, insurance and maintenance are covered in a flat rate; with a net lease, you may be required to pay extra for insurance, taxes and/or maintenance. Know what your rent pays for before signing so you don’t get socked with unexpected expenses.

Make Sure the Space Suits Your Needs

How easy is it to access your warehouse space? Is it convenient to your office? What type/size doors does the building have? Is the space climate controlled? These factors can all play into the price, which is why you don’t just want to go for the cheapest rent. If your merchandise is temperature sensitive, for example, make sure your warehouse space is air conditioned before you sign a lease.

Length of Lease, Renewal Terms and Subleasing

Commercial leases are more difficult to break than residential leases, so make sure you’re comfortable with the length of the lease agreement before signing. Longer leases help keep rent increases under control, but they also afford you less freedom. Also find out how easy it is to renew and/or expand the amount of space you have. Finally, look for terms about subleasing; if you outgrow the space before your lease expires, will you have the freedom to sublet the space?

Calculate Cubic Feet, Not Square Feet

Warehouse leases often measure space in square feet, just like other commercial leases—but that’s not the whole story because you’ll be stacking merchandise vertically. Ceiling height can make a huge difference in how much you can store in the space versus how much rent you pay—so always ask about ceiling height and calculate your own rent by cubic feet, not square feet, to learn the true value of the space.

Negotiating Terms

There is a commonly held belief that terms of large commercial leases cannot be negotiated. This is false. Terms can, and must be negotiated to your advantage. You know what economic terms you can live with, while your legal counsel can best advise you as to other terms which may be one-sided, overreaching, or just plain absurd. You might be surprised at what the other side is willing to bend on if you have some bargaining leverage, and they want you in their building badly enough. You can negotiate advantageous terms with your lawyer as a “silent partner” on the sidelines, or as an active participant in the negotiations: your choice.

A Dallas business law attorney can help you navigate the terms of a warehouse lease to make sure it’s right for your business. To learn more, call Armstrong The Law Firm, P.C., today at 972-424-L-A-W-S (5297).

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Armstrong The Law Firm, P.C.
Plano Location
1400 Gables Ct #103
Plano, TX 75075

Fort Worth Location (By Appointment Only)
5601 Bridge Street, Ste. 300
Ft. Worth, Texas 76112

Phone: (972) 424-5297