Pre-Lease Reports

I have written about pre-lease reports once before, but I still see it all the time.  In an effort to save time and money, many companies moving into a new facility forgo any real due diligence and simply hope that the building will be capable of supporting all of their requirements.  Sometimes this strategy works out.  If the building is relatively new, and/or the previous tenant filled their obligations to keep the building to code, chances are that the building is compliant with necessary code requirements.  Unfortunately, this is not always the case.  And simply put, when the incoming tenant does not have all the facts before a lease is signed, the required work and the time needed to complete the work can be extremely costly. 

We design and build Distribution Centers for a living, and we see this all the time.  Based on countrywide local code requirements all material handling storage systems require a permit before the building can begin, and an inspection before they can be used.  Code officials do not care about the viability or the tenants business or their own personal schedule.  Code officials are only concerned about one thing: Life Safety Requirements.  For every permit package application we are required to submit structural calculations, confirmation that the fire protection is sufficient to support the storage layout based on the commodity class, and an emergency lighting and egress plan.  And because each and every business has different methodologies, different commodities and different storage requirements, no permit application package is the same.  Even a simple pallet rack design requires all of this.  In fact, if the storage is over 12’, then a High Pile Analysis also needs to be done.  In rack sprinklers might be required.  Ingress doors might also be required.  Not even including the actual cost of the work itself, both of these can become costly very fast as they require an updated permit application package and time to complete the physical work. 

Garment on Hanger systems, Mezzanines, Pick Modules and Conveyor systems.  They all have very specific requirements that pertain to their own specific application.  A Pre-Lease Report can cost money up front.  But it can save a fortune when it actually matters because organizations tend to have a lot of things that revolve around the schedule of the material handling system being installed and ready for use.  A Pre-Lease Report will provide an analysis of the building.  It will tell you the capabilities of your sprinkler system and how that will effect what and how you can store your product.  It will tell you if you have sufficient ingress and egress doors.  Essentially, the Pre-Lease Report will help you understand the viability of the building.  Typically, the Report will also come with a preliminary design of how you want to store your product as that will be necessary in order to confirm your material handling storage system will work in your building.  Without this prior analysis, even the best designers in the world are only guessing as to what will work and what will not. 

There is also another benefit to the Pre-Lease Report.  Once a lease is signed, the tenant will have zero bargaining power.  However, if the potential tenant is armed with knowledge of the capabilities of the building, they will have a lot more bargaining power with the landlord. 

Our suggestion at ABCO Systems Inc., is to ensure you are working with a qualified Material Handling company that has the knowledge and capability to understand how this type of information can actually save you essential time and money. 

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