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man on forklift in industrial warehouse

Warehouse and industrial spaces are highly desired for their versatility, and in cities like Austin, they even carry a “cool factor”. Potential uses of industrial space range from storage and manufacturing to distribution or flex space.  Industrial properties also have very different requirements and obligations than other types of commercial real estate.

To avoid unpleasant surprises, be sure you understand the parameters of your warehouse or industrial space. Ask the owner or landlord and your commercial real estate broker plenty of questions when looking at properties and before signing the lease.

Here are a few things to look out for when leasing warehouse or industrial space in Austin, TX or the surrounding areas:

HVAC

Industrial buildings don’t always include building-wide HVAC. Instead, each tenant is responsible for installing and maintaining their own heating and air conditioning units. If you’re lucky, you may end up leasing a space where the previous tenant had installed and used an HVAC unit.  However, since you don’t know how the unit was maintained, you should always have the HVAC units inspected by a certified HVAC technician.

A qualified commercial real estate representative can help you negotiate any repairs that need to be made before signing a lease, including a maintenance contract or a possible warranty of the HVAC unit.  

Other Maintenance

In addition to your HVAC system, renting an industrial space typically requires you to handle basic maintenance and repairs to things like interior doors & locks, plumbing, and electrical issues.  Trash may also be at your own expense. Get crystal clear on what the landlord will cover and what you are responsible for. And if you have any doubts at all, ask!

Think Beyond Square Footage

Square footage will be an important factor in finding the right space for your business needs, but it’s not the only consideration. Be sure to think about cubic square footage as well, which includes the ceiling height. Ceiling heights can vary a lot and if you’re stacking products or working with large-scale materials, you’ll want to make sure you have enough vertical space.

Business Logistics

Your business will no doubt have specific needs that differ from those of other types of tenants. Closely review logistical details about the property, such as:

  • What types of safety systems are in place (sprinklers, alarms, etc.)
  • How much parking is available? Be sure to ask about overnight parking as well if you have a service or distribution fleet.
  • Is there sufficient clearance for any large delivery trucks?
  • How much electrical capacity is available in the space (for heavy equipment manufacturing)?
  • What type of loading dock do you need for your supplies and products (i.e. grade or dock level)
  • Can the space be modified to fit your needs? (e.g. using part of the space as an office, any public-facing use of the space)
  • What are the zoning rules? Make sure your warehouse or industrial property is zoned for your intended use, especially if you intend to have partial retail use.
  • Are there any money-saving features like solar panels or energy-efficient lighting?

Carefully Review the Lease Terms

Have a trusted real estate professional look over the lease terms to help you get the best deal. In addition to the points above, scour your lease for the following:

  • Rent-per-square-foot and total monthly rent
  • Security deposit and payment schedule
  • Length of lease (often a minimum of 3 or more years)
  • Rent increases, if any
  • Utilities, taxes, insurance, and maintenance (gross or net lease)
  • Is subletting allowed?
  • Renewal options
  • Provisions for breaking the lease, because you never know!
  • Arbitration clauses

Weigh Your Options

Finally, it’s to your benefit to look at multiple spaces, even if you think you’ve found the perfect space right off the bat. You should physically visit a variety of warehouse or industrial spaces and compare prices, features, locations, lease structure, everything. This process gives you a better idea of what’s truly out there, and knowing what’s out there gives you bargaining leverage. Not to mention, a particular space may inspire you to see your business in a new way.

Let us help you find the perfect industrial space in Austin and the surrounding areas.

Rebecca Rosenberg

Tower Blog Official Contributor