Key Considerations in Warehouse and Industrial Leasing

by Practical Law Real Estate

A Practice Note discussing key provisions and negotiation strategies for industrial and warehouse leases from both landlord and tenant perspectives. This Practice Note examines critical considerations such as evaluating site suitability, navigating the tenant build-out process, and allocating responsibilities for maintenance, environmental liabilities, and legal compliance. It explores different industrial property types, from manufacturing and distribution centers to flex spaces, and addresses unique issues for each. This Practice Note covers pivotal negotiating points including defining the premises, setting the lease term, structuring rent for triple net (NNN) leases, and defining permitted uses. Furthermore, it provides guidance on complex topics like HVAC systems, electrical service, security, landlord liens, and end-of-term restoration obligations, offering insights to help parties achieve a fair and balanced lease agreement.