[murphy625]

I'm about to move my machine into a building and start up my business.

I'd like to know if anyone here has experience with leasing industrial buildings that are 5000+ square feet in size..

What problems did you have?
Permits?
Lease agreements?
Building problems?
Landlord problems?

What to watch out for?

Thanks!
Murphy

[ViperTX]

Electrical Power, permits for hazardous chemicals (use, store, collect, discharge in the sewer..). Sewer traps. Emissions depending on where you are located.

Sanitary, sleeping quarters, etc.

[DieGuy]

Generally power is a biggie, and cost, the best deal I have found here for 3K sq ft. is about $0.58 per sq ft per month.

[mxtras]

I have had building issues and Landload, I mean - Landlord problems.

My advice - GET EVERYTHING in writing. I mean everything. If he says that he is going to even clean the windows and refill the toilet paper holders for you before you move in, put that in the contract. Pull the contract out every few days and read your responsibilities and his - this will keep everyone on track. The small stuff really adds up and in the beginning it may seem trivial but in the end it starts to pile up - especially when you already have too much to do as the business owner. Most of my troubles so far could have been avoided with better communication.

I would urge you to photograph the building inside and out before you do anything, then again before you move in, then again after you are in. These photos will prove any improvements and may save you thousands when the owner thinks you took a transformer that was "right there in that corner - I just know it was there....well it was before YOU moved in".

Also - make absolutley sure that you are A-OK with the City before you get too far into it. Go there yourself and talk to Zoning - DO NOT take the owner's word - it is your time and $$ he will be wasting if he thinks it's zoned M-1 and it's actually zoned B-1, for example.

Scott

[rcazwillis]

Photograph everything, hallways, walls, doors, bathrooms, etc. If anything is not perfect, insure the landlord sees it and recognizes it in writing. Keep the photographs forever. When you decide to move on and build your own building, the photographs will provide you proof of the condition of the building prior to you moving in. Be sure the photographs are dated.

You also need to discuss upgrades that you make to the property with the owner. Typically, all upgrades become the property of the owner regardless of who paid for them.

Make sure the contract does not renew automatically after one year. You will want to discuss the contract after each year. Lease values may have decreased in your area and you can get a better rate.

Negotiate upgrades to the property before you move in to it. If you need to make an upgrade to meet your needs, have the landlord pay for it. Say you want an alarm system to protect your property. He can give you a free months rent or he can pay for it up front. Remember, the upgrade will probably become his when you move out.

[mxtras]

What rcazwillis says about improvements in some states is the LAW. Make improvements to the property and they stay when you leave. Look into that for sure - good point, rcazwillis.

Consulting an attorney with issues such as this is a good idea. I assume you have one already if you are in business.

Scott

[murphy625]

Great stuff guys..

I did the picture things.. I have about 40 of them now of all areas of the building.. Im going to take more next time I go there..
The lawyer thing a "no-brainer" but it never hurts to remind someone eh?
I had to call up the city building / planning department.. The guy I talked to was REALLY helpfull.. Even told me that if he had to turn me down, he would point me in the right direction.. (Not sure what that means but it sounded good)...

The planning department wants a description of my "Process", what it entails, what it does and how it does it.. He said write out something brief.. I have chemicals that need to be used so he wants MSDS sheets on those and a diagram of how things will be laid out..
He said because I have "special considerations" (which I cant go into), I have to also go talk to the fire chief and get his permission....

This is getting really fun, really fast... LOL..

I was going to ask my wife if I could practice kissing her a$$ so I am all tuned up...

Murphy

[miljnor]

never volunteer any information to a government agency! its a hard rule for me... if they ask a question answer the question and don't add any other details....

My mother and father always told me "you can't realy cheat someone if they're cheating you" they were succsessful business owners.

And just remember the government always cheats.

and once the cats out of the bag, you cant put it back in!
ask me how I know.

just some words of wisdom.

[JavaDog]

never volunteer any information to a government agency! its a hard rule for me... if they ask a question answer the question and don't add any other details....

My mother and father always told me "you can't realy cheat someone if they're cheating you" they were succsessful business owners.

And just remember the government always cheats.

and once the cats out of the bag, you cant put it back in!
ask me how I know.

just some words of wisdom.

There are two rules to life.

Rule #1 - Never tell anyone everything you know.


Great thread guys, lots of good info!

[DieGuy]

Great stuff guys..

I was going to ask my wife if I could practice kissing her a$$ so I am all tuned up...

Murphy

Their's won't be as nice, and around here it is standard operating procedure so I get plenty of practice!

[Mcgyver]

Murphy, pm sent

[vladdy]

Improvements like shelving or pegboard/ slatboard, and other stuff screwed to the wall are usually not the landlords after the lease expires.. Normal practise is that anything that is SCREWED to the wall is considered removeable as a normal occurance, and belongs to the tenant, but if it's NAILED, it's permanent, and after lease expiry belongs to the landlord..
Only thing about screwing lots of stuff to the walls, is that on expiry the tenant 'should' be able to return the property to a reasonably close condition as it was at the start of lease.. normal wear and tear excepted..

If it makes any difference, my viewpoint is the landlords on commercial [not industrial] rental propery..It's the occupation that lets me farm as a hobby, and place with inexpensive CNC hobby equipment..

If in doubt, have it spelled out clearly in the lease as to who is responsible for what, not only right now, but when you decide to move on to a larger building, etc...

[murphy625]

Those are all great suggestions!! Keep them comming!!

Have any of you made any major mistakes or miscalculations on move in expenses or other costs ? Maybe something you thought would go one way and it ended up costing a lot more or less than what you planned?

Got screwed by something?

Great stuff...
Thanks for all the suggestions and the PM's!!

Murphy

[mxtras]

It will ALWAYS cost more than you think unless you have already learned to multiply your best estimates by at least 1.5....the lower the number, the more experience you must have!!

I budgeted $3500 just for move in and upgrades. Minus furniture and computers, I have spent about $3200 so far and I am a week away from moving in. I think I am gonna be over my budget....it never fails.

I have been advised to keep all business descriptions to an absolute minimum. They won't be monitoring your daily activities. I HATE the questions - the people doing the asking seem to have no clue about industry or manufacturing - to them, all manufacturing involves lots of chemicals, vibrating equipment and smoke.

Scott

[miljnor]

I have been advised to keep all business descriptions to an absolute minimum. They won't be monitoring your daily activities. I HATE the questions - the people doing the asking seem to have no clue about industry or manufacturing - to them, all manufacturing involves lots of chemicals, vibrating equipment and smoke.

And if your area is like california. never ever mention that you will be doing anything automotive! not even if you do.

My answer to the question "what do you make" is "machined parts". The will try to make you be specific but all you have to say is if its made out of "XXXXXX" then i make it. (i make things mostly from metal so thats what i put in.) Since most job shops dont get to pick what they make thats realy all you need...

remember Metal parts GOOD! Automotive parts BAD!

[Mcgyver]

Michel’s points are good. Two groups you need to satisfy re use - zoning and the landlord....but don't spin too much or you're inviting future problems. Around here (Toronto) specific zoning is require for auto repair, but from a practical view it usually doesn’t work in a regular industrial multi anyway because of the lack of parking.

Zoning and landlords (around here) don’t care about auto parts manufacturing any more than they would for other metal manufacturing. Most, if they had a choice would take a distributor over a manufacturer because it’s easier on the building. As the buildings with the highest clear heights have the most appeal to distribution, manufacturing will find a warmer welcome from landlords with older, lower clear height buildings.

A landlord of a new retail plaza once leased space to a dry cleaner. Sounds pretty compatible, probably no use issues right? Well the landlord didn't get specific on the use clause and the dry cleaner wasn't just a store front but a processing plant as well. In suburban retail buildings, which are usually slab on grade, this wouldn't have been an issue.....but this building was a steel frame with a basement. The standing wave created hit hardest 3 doors down at the bank. If it wasn't nailed down including terminals it just walked right off the counters and desks to crash to the floor - they thought it was an earthquake!"

[murphy625]

Well I just got turned down by the city..
They said "NO WAY NO HOW" (that's a quote) LOL

The guy said I must be in the heavy industrial..
Metal parts = yes
Chemicals = yes
Stuff that smells = yes

That was about all it took.. LOL

Oh well.. back on the trail I go..
Murphy

[mxtras]

Zoning issues suck. Sorry to hear it, Murphy.

I don't really know what you're going to be doing, but you could always try the 'Research and Development' angle - it fits into C1 , C2 zoning.

Scott

[ViperTX]

Zoning is there for a reason!

[murphy625]

I agree there are good reasons to have it zoned..

But there is a shady line between Light Industrial (M1) and Industrial (M2)...

Obviously, if I had a 100 ton stamping press that was going to make glass rattle, I could see there point..

Oh well.. On to the building hunt again..

Murphy