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How can you negotiate lease agreements for tenants with specialized storage needs?

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If you are a tenant looking for a commercial space that can accommodate your specialized storage needs, such as temperature control, security, accessibility, or compliance, you may face some challenges in finding and negotiating a suitable lease agreement. However, with some research, preparation, and professional guidance, you can secure a space that meets your requirements and budget. Here are some tips on how to negotiate lease agreements for tenants with specialized storage needs.

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1 Know your needs and options

Before you start searching for a potential space, you should have a clear idea of what kind of storage features you need, how much space you need, and what your budget is. You should also research the market conditions, the availability and demand of spaces with similar features, and the average rental rates and incentives. This will help you identify your options, compare them, and determine your negotiation strategy.

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Victoria Maidhof, ARM?, TCS, CPM? Candidate

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I have worked as an on-site property manager in affordable, luxury, student and senior housing as well as commercial properties, and typically there are not many storage options. Units are either assigned to apartments and there is no fee, or there may be a couple of different size options at different price points. The most important thing I would recommend to a resident in search of a storage unit would be to make sure that they secure renters insurance and also make sure that the unit is securely locked to avoid theft. I have seen areas where units are located flood from plumbing problems or weather and landlords will not cover the damages.

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2 Hire a tenant representative

A tenant representative is a commercial real estate broker who specializes in representing the interests of tenants in lease transactions. A tenant representative can help you find and evaluate potential spaces, negotiate the best terms and conditions, and handle the legal and technical aspects of the lease agreement. A tenant representative can also leverage their market knowledge, network, and experience to advocate for your specialized storage needs and secure favorable concessions from landlords.

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3 Negotiate the lease terms and conditions

Once you have found a space that meets your specialized storage needs, it's essential to negotiate the lease terms and conditions with the landlord or their representative. When discussing rent, it's important to consider the base rent, rent escalation, rent abatement, operating expenses, taxes, and insurance. Additionally, you should negotiate the tenant improvement allowance, which is the amount of money provided by the landlord to make improvements or modifications to the space. Furthermore, you should clarify who is responsible for maintenance and repairs of the space and specialized storage features as well as procedures and consequences for any breaches or damages. Lastly, it's important to negotiate the length of the lease term, renewal options, renewal rates, flexibility, security of the lease term and potential changes in your storage needs over time.

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4 Review the lease agreement

Before you sign the lease agreement, you should review it carefully and make sure that it reflects the negotiated terms and conditions. You should also consult with your tenant representative, your lawyer, and your accountant to ensure that the lease agreement is legally sound, financially viable, and aligned with your business goals. You should also check for any errors, ambiguities, or hidden clauses that may affect your rights or obligations as a tenant.

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5 Maintain a good relationship with the landlord

After you sign the lease agreement, you should maintain a good relationship with the landlord or their representative. You should communicate regularly, pay your rent on time, comply with the lease terms and conditions, and report any issues or concerns promptly. You should also seek feedback, suggestions, or assistance from the landlord if you need to make any changes or improvements to your specialized storage features. By maintaining a good relationship with the landlord, you can ensure a smooth and successful tenancy and potentially negotiate better terms for future renewals or extensions.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Jamie Lythgoe

RE/MAX Broker, Property Manager @ Powder Mountain, Inc Expertise in Resort Real Estate Sales and Ski Area Management
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Variable season weather conditions should be addressed which is hard to imagine when opposite season. I had a storage for some business items. Where large amount of ice build up and slip and fall Injury became an issue that accessible ice melt would solve. Extreme cold and heat are both problematic so climate control units are more costly but may be a better option. Hours of access, electronic monitoring, rain gutters, lighting or access to electricity, access to water, some trash and junk removal for an added fee are also evaluation items. Everyone things storage will be short time and it rarely is. Make it an attractive amenity if possible. Well appreciated and helps with retention and a simple way to improve a commercial place.

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How can you negotiate lease agreements for tenants with specialized storage needs?

1

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3

4

5

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1 Know your needs and options

2 Hire a tenant representative

3 Negotiate the lease terms and conditions

4 Review the lease agreement

5 Maintain a good relationship with the landlord

6 Here’s what else to consider

Commercial Leasing

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How can you negotiate lease agreements for tenants with specialized storage needs?

1

2

3

4

5

6

1 Know your needs and options

2 Hire a tenant representative

3 Negotiate the lease terms and conditions

4 Review the lease agreement

5 Maintain a good relationship with the landlord

6 Here’s what else to consider

Commercial Leasing

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