Renting a warehouse or other industrial space can be one of the most costly items in a business' operating budget. In addition, the cost of commercial real estate rentals can vary widely by location and region. This can make budgeting difficult. This guide will help business owners understand the process of landlords setting rents for warehouses and industrial spaces.

Although rents can be affected by location and region, landlords tend to base warehouse costs on these factors:

Base Rent: 

This represents the amount you will pay per square foot per year. However, some landlords may charge it per month. Your base rent will be higher if you have more industrial space.

Insurance And Property Taxes: 

These fees are calculated on the whole property. Your renter fees will be proportionate to the space or warehouse you will be using. There are always exceptions to the rule, but taxes and insurance are likely to rise year after year. It is therefore important that business owners factor those increases into their long-term budgets.

Common Area Maintenance (CAM):

These are costs to maintain common areas like elevators, hallways, and parking lots. The fees will vary depending on what space you rent. Business owners must understand how landlords define common areas.

It is important to know the different types of leases available. For example, landlords can quote industrial rent in two ways: triple net (NNN) or industrial gross (IG).

Industrial Gross:

 Is a comprehensive rate. It often includes property taxes, insurance, and CAM. All of these are included in the annual rental cost per square foot. The IG rent will let tenants know where they stand.

Triple-Net (NNN lease):

Covers rent, taxes, insurance, maintenance, and insurance. Tenants must also consider any additional fees such as utilities and other operating costs. Warehouse landlords will often quote triple net leases. Warehouse landlords are more likely to quote triple net leases. Owners need to be aware of what they get for their rent, as industrial and warehouse rents can make up a significant portion of an organization's operating budget.