Industrial real estate leasing can get complicated, fast.
And if you haven’t done your due diligence, these complications can become an unnecessary headache. Luckily, such circumstances can be avoided. And the best way to do that is to fully understand the asset in question and the rental and leasing conditions of the agreed-upon contract.
Keep reading to learn seven things to consider regarding industrial properties for leasing in Calgary.
Important Factors for Industrial Properties for Lease
Each variable listed below must be pondered and thoroughly questioned before leasing any industrial property on the going market. Every factor will influence the selection of tenants, operations of the business, and future occupancy.
1. Premises Location
Assess the property’s location, the streets, and the neighbouring estates.
Try to find problems that may grow from the premises and affect the location. For example, some abutting businesses might find tenants and property placement difficult. A typical issue that will present itself with industrial properties for lease is car parking.
Client and employee car parking should be pondered when it comes to the business under consideration, which brings us to the next point…
2. Parking
What rules and regulations apply to parking around the facility and outside the property? Does that affect lease condition or property use? Think about the pressures of car parking experienced by employees and clients. How will vehicles move through the building at certain times?
These are all critical questions to ask and considerations to ponder for industrial property leasing regarding car parking.
3. Security
Each industrial property will have security variables you’ll need to consider and integrate into the leasing procedure.
The landlord should supply the security of the building. However, the tenant may decide to incorporate additive technological security features: Cameras, security guards, swipe card networks, etc. These additional security measures should be clearly detailed within the lease agreement.
Once the lease has expired, the security additions should be removed at a cost to the tenant.
4. Vehicle Access
Certain businesses require trucks, cars, deliveries, etc., to occur on the same premises.
Some of these deliveries are sizeable and occur with regularity. Moreover, they can also take place at any time during the day. So how do vehicles move within the fences to make their deliveries on time?
Many industrial properties are better suited for these kinds of product delivery logistics than others.
5. Rent Review Timings and Requirements
Set standards for rent review in every lease negotiation, as it will help you achieve proper rental growth and, as a result, market rent growth. You can choose the rent review options with market increases, fixed increases and percentage increases.
6. Covenants of Tenants
Specific clauses must be set in the lease as prerequisites for the tenant to meet.
An example is a redecoration or refurbishment within the lease term. Any long-term lease should have that as a requirement for the tenant. Another instance would be the insurance coverage employed by the tenant during residency.
7. Covenants of Landlord
As part of the term lease agreement, repairs and upkeep will be the landlord’s responsibility.
Specify what they are and how they will be noted in the contract. For example, if it’s an ‘aging’ property, upkeep requirements will be more demanding and expansive. As such, the lease should define how repairs are treated.
It’s helpful to clarify who retains the liability and what will happen if a major event takes place on the property that affects property use in the future.
Final Thoughts
There are many variables to keep in mind for industrial property leasing in Calgary.
However, with some forethought, you can avoid many hiccups from a lack of study and reparation. That little extra effort in the beginning indeed does go a long way in the end. And that’s what we at CMS Real Estate Ltd. are here to assist you with.
We are a full-service industrial real estate brokerage providing services in sales & leasing, property management, and more. If you’re interested in speaking with a professional about industrial real estate leasing, contact us today for more information.