Commercial Lots for Rent: What You Need to Know Before Signing
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
If your business plans include building your own commercial property from scratch, your first step may be to locate and lease a commercial lot.
Commercial lots of land are the foundation of various new business endeavors, from simple parking lots to modern warehouse facilities and retail strip malls.
No matter your plans, it's important to understand the unique factors you'll encounter when scouting for a commercial lot. In particular, there will be additional situations to consider that aren't part of the process when renting pre-built commercial space, such as retail storefronts or office buildings.
Here, we'll introduce the different types of commercial lots you can usually choose from before taking you through the steps required to secure the best possible deal.
Understanding Commercial Lot Types
While some commercial lots are vacant land with no utilities, others may be in different stages of readiness for your business.
During your search, you may see listings for:
- Vacant land: this may be unpaved and require extensive preparation.
- Parking lots: These are usually paved, although they may not be suitable for a building foundation.
- Storage yards: These are used for storing materials, equipment, or vehicles. They're often open-air lots.
- Industrial lots: Used for manufacturing, production, or heavy industrial activities. These may include factories, warehouses, or processing plants. They may be zoned for industrial use only.
- Mixed-use lots: These often combine commercial, residential, and sometimes light industrial uses. They may be adjacent to a retail or multi-family property.
Before you begin your search, you'll need to decide which types of commercial lots and zoning guidelines are most suitable for your business plan and budget
Zoning and Land Use Regulations
One of the most important factors to consider when leasing a commercial lot is zoning.
After verifying that the lot's zoning is compatible with your business, check for any restrictions (operating hours, noise levels, permitted activities) that may affect your business operation.
It's also a good idea to consult with local zoning officials or a real estate attorney to ensure compliance with all regulations.
The Lot's Perfect, But the Zoning Isn't
If you locate an ideal commercial lot but it's zoned for something other than your intended use, this poses a complex problem.
Why? If a lot appears to be ideal for your business plans but its zoning guidelines restrict its use, applying to have this changed—a process called rezoning—is rarely simple.
Before you submit a rezoning request, you'll need to be familiar with current zoning laws. If you proceed, you'll want to survey the area and conduct comprehensive due diligence before filing a rezoning request with the local planning board.
You'll most likely meet with the zoning committee to present your proposed business plan before your rezoning request goes under review by the planning committee.
After you've located several potential lots, you'll want to examine their locations and how they will affect your business' success.
Right Place? Things to Consider
Compare your business needs to the lot's features.
Will you need:
- Easy access for your customers and suppliers?
- Visibility and/or convenient access from major roads or highways?
- A surrounding neighborhood or area that's compatible with your business?
You'll also want to visit the site at different times of the day to observe the nearby daily traffic patterns and review the lot's access.
Access and Easements
Be sure that customers can visit your business by reviewing the access rights and any easements affecting a lot.
- Confirm that you have legal access to the lot from public roads.
- Check for any easements that might restrict your use of the property.
- Understand shared access arrangements if applicable.
After you've decided which lot is your first choice, you'll need to prepare to negotiate a lease with the owner.
Lot Lease Terms and Clauses
Commercial lot leases are similar to commercial real estate (CRE) leases.
Depending on your business plan and the landlord's requirements, your initial lease will contain most or all of the following:
- The term in years or months;
- Rent calculations;
- Rent escalation clauses;
- Options for renewal or purchase; and/or
- Subletting rights.
Carefully review these terms and negotiate when possible to ensure they align with your business plans.
Depending on the type of lot lease you finalize, you may need to improve or renovate before your business plans can proceed.
Ideally, you'll have already made a ballpark estimate of the costs and negotiated these with your landlord.
Site Condition
Take a walk around the lot and make notes of its current condition.
Depending on your plans, you may need to arrange for:
- Initial paving or grading;
- Installation of fencing and security features;
- Lighting;
- Sewage and drainage systems; or
- Utility connections, such as water and electricity.
You may also need to conduct an environmental assessment to check for contamination, which can have major legal and financial implications.
If your chosen lot has passed muster and your lease has been reviewed, it's time to proceed to utilities and insurance.
Utilities and Insurance
Depending on your business, you may need to arrange for the installation and activation of electricity, water, natural gas, and/or internet service.
Insurance for your business may include general liability, property, and environmental liability coverage.
Depending on your lease requirements and/or local regulations, you may need to shop for additional types of coverage.
Browse Commercial Lots in Your Area for Free on MyEListing.com
MyEListing.com maintains one of the largest databases of commercial lots and property in the country.
No matter what you decide, you can begin your search right here at MyEListing.com, free of charge.
Other recent articles
Article Search
Share
All Article Categories
