What Costs Are Involved When Leasing Warehouse Space?

Costs When Leasing Warehouse SpaceWhen leasing warehouse space you want to make sure that you know who pays (Landlord or Tenant) for what BEFORE signing a lease contract.  The costs involved when leasing warehouse space can be different depending on who owns the property and how they operate it, and the commercial real estate market that you live in.

In Austin, Tx most warehouse spaces are leased as Triple Net (NNN) leases (aka operating expenses).  What that means is that the Tenant pays a base rental amount PLUS the operating expenses associated with running the building.  These include taxes, insurance, and maintenance cost.  In addition you will also be required to pay for your utilities, the costs to maintain the HVAC units, and property and liability insurance.

So when you are creating your monthly budget make sure you account for all of the expenses above.  To give you an example let's say you want to lease 5,000 sf of warehouse space in Northwest Austin and let's assume everything has already been negotiated.  The landlord is quoting a base rent of $0.60 + $0.20 NNN.  Your total monthly estimated costs should look something like below.

  • Base rent – $3,000 per month (5,000 sf X $0.60)
  • NNN – $1,000 per month (5,000 sf X $0.20)
  • HVAC Maintenance – Estimate $50 per month
  • Electricity – $700 to $800 per month.  (average is $2 sf per year so 5,000 sf X $2 / 12)
  • Property & Liability Insurance – $60 per month +/- (depends on your business)
  • TOTAL ESTIMATED MONTLY COSTS – $4,910 per month

If you have any questions about the costs involved in leasing warehouse space or need help finding Austin warehouse space for lease feel free to contact us.

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