1. Home »
  2. Lease Agreements »
  3. Commercial »
  4. Industrial

Industrial Rental Agreement

An Industrial Rental Agreement is a specific type of commercial leasing document used for forming a series of binding rules and obligations that apply to the renting of a space or building that will be used for manufacturing, storage, assembly, and other heavy-duty purposes. While an industrial property will almost always have space for offices, the ratio of space dedicated to working with physical products and material will often outweigh all other areas by a wide margin. While every contract is different, a rental agreement for industrial buildings will contain lease provisions that fall in favor of net utility expenses, as tenants often take on responsibility for nearly all of the property’s costs.

What to Include

When making edits to an existing contract, drafting your own, or looking for an agreement that fits your needs, make sure the document includes the following:

  • Space for the parties names, addresses, and contact information;
  • The term of the lease;
  • What the property will be used for;
  • The base rent ($) before any other expenses;
  • What expenses/utilities the tenant is responsible for;
  • Who and where rent is to be paid;
  • The security deposit required (if any);
  • Consequences for late rent and other infractions;
  • The general provisions of the lease (rules on signs, subletting, damage, entry, and so on);
  • How the property is to be maintained (ties into expenses);
  • Insurance requirements;
  • What constitutes default and breach of contract;
  • A space for listing any special conditions; and
  • The signatures of the landlord, tenant(s), and any agent(s) involved.

Types of Industrial Real Estate

Warehouses

A type of building dedicated to storing materials and products, a warehouse is (on average) the largest type of industrial property. Warehouses often have little foot-traffic, allowing the property to have a small portion of its total available square footage dedicated to offices and parking. Because a warehouse only serves as a middle-point in the supply chain, it needs to be accessible by at least one (1) type of major method of transportation. This is often why warehouses can be found near docks, airports, and major highways.

Manufacturing plants

These properties take-in materials and convert them into the products we use today. From clothing to electronics, chemicals to tools, and everything in between, these facilities are the most complex type of industrial property. Companies that are looking to open a manufacturing plant often build their own, as this allows them to perfect their assembly process by designing a structure around their specific needs.

Assembly/distribution buildings

Often large in size, these buildings take in partially-completed materials and turn them into a completed product. These buildings can also include an area specifically for distribution, allowing them to ship their items directly to consumers or to warehouses around the country. Unlike manufacturing plants, these spaces are frequently located in high-traffic areas, or places that are easily accessible to means of air, sea, or land transportation.

Storage facilities

Self-storage facilities and spaces provide civilian consumers with a way of storing items they can’t fit in their own homes and apartments. These can be climate controlled and tailored for storing specific types of items (like vehicles, for instance).

Flex spaces

Flex space serves as a middle-ground between industrial and office/retail space. The “industrial” section often includes a loading bay door as well as open space which can be customized to meet the needs of the business tenant.