Finding the right warehouse space is a challenge even under the best of circumstances. Finding the right warehouse at the right price is even more of a challenge. But no-one ever became successful without conquering a challenge or two. Here’s a quick primer on finding cheap warehouse space for rent.
“Cheap” is Not the Same as “Desirable”
At first blush, warehouse space might seem like it should be a cheap investment. Indeed, it can be. But cheap warehouse space is oftentimes not good enough. For instance, do you need HVAC? A secure location? A sturdy, concrete building? Any of those features are going to cost extra. Most cheap warehouses are metal buildings with no climate control and minimal, if any, security.
Another major consideration is location. Cheap warehouse spaces tend to be out of the way, which can make deliveries a challenge. You’ll pay more if you want to be near an airport, highway, or rail terminal.
For instance, in Austin, most of the nicer warehouses are located near highways, where it’s easy for 18-wheelers to make quick deliveries. If you choose a more far flung location, it can actually cost more in the long run. The money you save on rent will instead be spent on higher delivery fees. That said, there’s no one, universal sweet spot in the balance of price vs. easy access. A lot depends on how — and how often — you receive shipments.
There’s also another advantage to having a nicer warehouse; it shows a better image to your customers. This isn’t an issue if there are never customers in your warehouse. But if your warehouse is also going to be a place where you do business, do you really want to invite your customers to a cheap metal building in a marginal neighborhood? Far better to invest in a concrete, tilt-wall building that’s close to the airport and has on-site security.
Finding the Right Warehouse Space
Doing It Yourself
If you have the time and market experience, most people just search the internet to find warehouse space. One of the many sites is loopnet. These databases can be a great place to start, but take anything you see with a grain of salt. Oftentimes, the information is outdated or flat-out inaccurate. The only way to truly know if a space is still available is to call the landlord’s agent and hope that they return your call.
You may also need to drive around and call on “For Rent” signs to find a warehouse space.
Once you’ve got a list of properties, it’s time to go visit them. Oftentimes, you’ll fall in love with one space, and be tempted to sign a lease right then and there. Don’t. Instead, wait until you’ve found two or three potential candidates. This way, you can make a more objective analysis. Moreover, you’ll have more options if the deal on your first choice falls through.
Hire A Tenant Representative
Warehouse space is like any other kind of real estate: you can expect to do some haggling. That said, unless you’re an expert on the commercial real estate market, it can be tough to determine what’s a fair price. For this reason, many tenants hire a broker or tenant representative to find warehouse space and do their negotiating for them.
A broker or tenant rep is a commercial real estate agent for business renters. They help you out with the entire process, from finding a location to negotiating the deal to handling all the paperwork. With a good tenant rep, you’ll spend minimal time hunting for warehouse space, and more time running your business.
A tenant rep will know different landlords throughout the city, and which ones are easiest to negotiate with. They’ll also often have knowledge of spaces that aren’t advertised to the general public. Many landlords don’t bother advertising. They already have plenty of demand, and get new tenants from brokers or reps. If you’re hunting for a location on your own, you won’t even know these spaces exist.
What to Look for in a Warehouse Space
The first question you’ll have to ask yourself is why you’re using the warehouse space. For instance, if you’re storing a bunch of ceramic tile, most spaces will do. But if you’re storing electronics, you’re going to want a climate-controlled space.
Next, you’ll need to consider location. Do you want to be close to the highway? Near another business? The airport? Your home? Similarly, a congested area can be harder to deliver to, but will also be closer to more other businesses.
When thinking about location, you’ll also need to consider zoning. Depending on the nature of your business, you may be limited to certain areas of the city. Never rely on a chart or a website for zoning information. Call the local zoning office and speak with a real human being.
The building design and layout are also important. If you have employees permanently working in the space, you’re going to need a restroom. Similarly, if you need to accept deliveries from 18-wheelers, you’ll want a warehouse with a proper loading dock.
Finally, consider whether you expect to be upsizing or downsizing in the near future. If so, you’ll want to sign a shorter lease. If not, you can often get a better deal by signing a longer lease.
How Much Does Warehouse Space Cost in Austin, Texas?
Most of the warehouse space in Austin is located in Southeast and Northeast Austin. You can find updated Austin warehouse space lease rates here. There has been a lot of Industrial space leasing activity in Austin for quite some time. Because of that inventory of available space has decreased and warehouse lease rates have increased a bit. If leasing bulk warehouse space expect to pay at least a base rate of $0.65 sf / mo and up . Office warehouse base rates will be at least $0.85 to $1.00 sf / mo. In some locations higher. Typically smaller spaces have higher base rates.