Leasing warehouse space has the potential to yield some attractive benefits for a business looking to maximize its distribution activities. Doing so, however, represents a significant financial and logistical undertaking, which means the best approach to exploring leasing opportunities is to do so only after considering a number of key factors.
These will vary depending on the specifics of your business. The following, however, are among those most likely to affect the financial and operational viability of a lease, and should be reviewed carefully before signing any agreements.
Leasing warehouse space costs much more than just rent. Your expenses will include utilities, insurance, labor security, maintenance, and other costs. For this, make sure to find out what expenses would be your responsibility, and which would be that of the landlord. Otherwise, you could be in for an unpleasant surprise.
Keep in mind that this doesn’t account for ad hoc costs, like roof repairs, which will arise from time to time.
It goes without saying that whatever storage space you lease should be appropriate for the quantities of goods you intend to store there. Arriving at the required cubic square footage is more or less straightforward when it comes to your present needs, or even those for the near future. Anticipating these beyond that, though, can be a challenge. Leasing is a longer-term commitment than other options such as renting from a public warehouse, and is therefore, less flexible. This could limit your ability to respond quickly to business changes as they occur.
Markets shift and distribution networks evolve. Should your storage requirements change with them, the warehouse you leased my no longer be appropriate. On one end of the spectrum may be the case where you are storing fewer goods than once anticipated, leaving you paying for empty space. On the other end is a situation where you have more goods than anticipated, compelling you to find supplemental space.
Therefore, it’s best to approach leasing warehousing space when you can project your storage needs with some level of confidence—at least for the length of the lease you’re discussing.
If you’re looking into the option of leasing warehouse space, you’ve likely already decided where in the world you’d like to store your goods down to the specific city. There is still more to be decided in terms of location, however.
Even within a city, there are still factors that can impact how ideal a potential space is. For warehousing, one of the most important is how close a potential space is from public transport such as airports, railroads, and seaports. Houston, for example, boasts a wide range of transportation options, but its downtown area offers perhaps the best balance between each of them, making it a popular hub for logistics.
Finding the right-size warehouse in your desired budget and location does not necessarily mean it’s the right fit for your business. Depending on what materials and/or goods you want to store and value-added activities you’d like to perform in your space, such as repacking and handling hazardous materials, you may need to adhere to strict zoning laws.
Safety & Security
Another important thing to consider when weighing possibilities for leasing is what safety and security measures the facility already has in place, and what you may need to install yourself.
At a minimum, commercial warehousing facilities should include safety and security elements including:
- Perimeter Fencing
- Video Surveillance Systems With 24/7 Monitoring
- Entry Alarm Systems
- Fire Alarm & Extinguishing Systems
You can read more about the most important warehousing safety and security standards here.
Regulations & Certifications for Hazardous Material Storage
This consideration is heavily related to that above, but is of such specific importance that it deserves its own section. It is without question that the safety of surrounding communities is of high priority to governments at every level when it comes to the storage of chemicals and hazardous materials.
If you intend to lease warehousing space, it is in your best interest to become well acquainted with the specific regulations for whatever location you are considering. You may be responsible for maintaining any such certifications, which can be a difficult and expensive task.
This challenge can be more difficult to overcome depending on the location you’re looking for, especially in some high-demand areas. Downtown Houston, for instance, has strict restrictions on the storage of chemicals and hazardous materials. American Warehouses maintains impeccable adherence to these regulations, making it one of the few facilities in the area authorized to store such inventory.
Ask Yourself: Do I Truly Need Private Warehouse Space?
Leasing warehouse space has its advantages, and for many, is an advisable means of optimizing logistics operations. That being said, it is not a one-size-fits all solution for every business.
Warehousing is not merely a stage in your overall logistics operations, and running a warehouse safely and efficiently is a business within itself. This can certainly be achieved with proper dedication, but also requires significant investment and resources, both up front and in perpetuity.
Public warehousing is in many ways a superior alternative to leasing.
Renting enables you to bring your products to a facility already outfitted with the equipment and storage types you need, without having to renovate an existing space. This method also grants the greatest flexibility for your storage needs, so you’re only paying for what you require, at any given time. Renting from an established warehouse also ensures all the behind-the-scenes requirements—such as certificates and security—are being taken care of by industry professionals, around the clock.
A public warehouse such as American Warehouses makes it a mission to maintain the highest level of efficiency in the day-to-day, meaning you can focus more on running other aspects of your business.
American Warehouses has been helping businesses move their commercial inventories through the Houston, Texas area for more than 70 years. Contact us to learn more.