Warehouse Sub-Market and Square Footage
The size of any warehouse space and those within a specific sub-market can greatly determine the base leasing rate. For warehouse properties, the warehouse leasing rate is derived as a base rate typically that has NNN (triple net expenses) added onto the rate. Landlords will typically try and want to maximize their rental rates for warehouses to ensure income stream, this is an accepted practice and there isn’t much a tenant can do about it. The advantage a tenant has would be in down markets, not up -markets like Austin is currently seeing for 2017 and into the first quarter of 2018.
Leasing brokers or tenant representatives are usually more motivated to lease larger spaces, at Shire Commercial we start leasing warehouse properties at 3,500SF and up. Always looking for the best interests of the tenants , we will help you negotiate the best deal within the sub-market you currently want to place your business. Due to sub-market dynamics that are different in each sub-market from Cedar Park to Round Rock to San Marcos each has its own dynamics and factors that will directly affect leasing rates for warehouse space. Some of these factors may be the demographics, economics and vacancies within the property you are interested in. It is our standard practice when working with tenants , that the landlord make the initial offer rather than the tenant. All offers are written via a Letter of Intent or LOI (more commonly known within the commercial real estate industry). Letter of intents are not binding and are negotiation vehicles in which Clients can take advantage of Shire Commercial’s expertise on market conditions and strategies to help tenants execute new leases or renew existing ones. Looking at warehouse properties in lower vacancy sub-markets such as Northwest Austin may not be as flexible as higher vacancy sub-markets such as Southeast Austin.