Leasing Industrial Space: What You Need to Know

Is your growing business in need of a larger industrial space for manufacturing, storage, fulfillment or distribution? Leasing industrial space (rather than purchasing the building outright) can be a smart financial decision for many types of businesses.

That said, industrial space leases tend to be quite complex, and usually come with more considerations than standard office, retail or residential leases. Read on for everything you need to know before leasing an industrial property.

1. Consider Your Industrial Space Needs

No two businesses operate completely alike, with the same processes, machinery and space requirements. The exact nature of your business will determine your ideal industrial space. 

For example, are you searching for a space that will primarily serve as a manufacturing facility, warehouse, distribution center, or a combination of all three? Likewise, what are the sizes and volume of the products you will be manufacturing or storing? What types of equipment will be required for these processes? Convenient for your workforce? 

After considering these and other factors, you will be able to make a list of must-have and nice-to-have features, which may include:

• Extra high ceilings for stacking equipment or operating large machinery
• Lighting 
• Reinforced flooring for heavy loads
• Truck terminals and loading areas
• Column spacing
• High-volume power sources
• Specialized plumbing
• Showrooms or office spaces
• HVAC capacity (not all industrial spaces are equipped with an HVAC system, and may be partially or fully unheated)

2. Think Big-Picture

Your monthly rent budget will be one of the biggest considerations when determining whether or not you can afford to lease an industrial space…but it’s not the only expense to consider. Have you anticipated ongoing operating expenses, such as insurance and taxes? In some cases the landlord may cover this, but not always. 

Similarly, you may need to pay for maintenance costs such as repairs and waste disposal. Know exactly what you will be responsible for covering before signing the lease agreement. Typically, leases for industrial space fall under two categories: gross leases and net leases.

Finally, it’s a good idea to understand how your rent costs may change over time, as well as whether or not you will have the opportunity to expand into adjacent spaces in the future.

3. Prioritize Safety & Zoning Compliance

Industrial spaces have significantly more safety concerns and zoning regulations than standard office or retail spaces. It is your responsibility to make sure your chosen property is zoned for your intended use. This is especially important if you will be utilizing hazardous chemicals or other materials during your manufacturing processes.

Additionally, pay careful attention to the terms of your lease. Will you need to request any special permissions or obtain permits before conducting business? Lastly, be sure you understand federal, state and local safety regulations, and be prepared to install required safety systems as needed.

Putting safety first will not only keep your employees healthy and safe, but will also help your business avoid major fines or other penalties.

Searching for an industrial space for lease in the greater Cleveland area? Cushman & Wakefield | CRESCO Real Estate’s Industrial Advisory Services team offers an unrivaled combination of experience and resources to handle any industrial real estate transaction. Contact our team of experts today!