What Businesses Should Know Before Signing a Warehouse Lease: Q&A With Brandon Page

By Sam Laird

Choosing the right warehouse space in 2026 involves far more than comparing rental rates. Executive vice president Brandon Page, head of Leasing and Customer Solutions at Link Logistics, breaks down what companies should prioritize when negotiating a warehouse lease, how e-commerce and power demand are reshaping site selection, and the most common industrial real estate mistakes businesses make.

What should businesses prioritize when negotiating an industrial real estate lease?

An industrial building's functional fit for the business matters more than the headline rental rate. Many tenants focus on securing the lowest face rate, but face rate is only one part of total occupancy cost once operating expenses are factored in. A lower rate on a warehouse that doesn't support day-to-day operations can cost a company more in the long run than a slightly higher rate on a well-located, functional industrial building that truly meets their needs. Landlords and tenants initially center lease negotiations on base rate, but the more important question is whether the building works for the tenant's specific use and maximizes operational efficiencies.

What warehouse attributes should businesses evaluate beyond rate?

Several physical and locational factors determine whether an industrial property will actually work for a tenant's operations:

• Location relative to customers, suppliers, and transportation routes
• Access to competitively priced labor, including a reasonable commute for the workforce
• Power availability for current equipment and any planned automation or electrification
• Clear height sufficient for the tenant's racking and storage needs
• Truck dock door count and truck court depth to support loading and unloading volume
• Employee and trailer parking, if the operation requires it

A location that looks ideal on paper can still create problems if a company can't competitively hire locally or if key management faces a long commute—both of which affect employee retention.

What lease terms are typical in the industrial market today?

Lease terms generally fall into three, five or 10-year increments, though the exact length depends largely on the size of the space and the customer’s confidence in their business needs. Three-year terms are more common among smaller businesses, while larger companies and those requiring significant capital improvements more often sign longer terms. Buildings of a million square feet or more are typically leased for 10 years or longer, given the scale of capital investment involved and the time needed to stand up these operations.

What kinds of flexibility can tenants realistically negotiate into an industrial lease?

Renewal options are the most common landlord concession that provides flexibility, giving tenants the right to remain in a space as long as they're meeting the terms of the lease. Termination rights and fixed expansion rights are harder to negotiate, since landlords can't commit to space they don't yet know will be available. The size of a landlord's portfolio can also affect a tenant's practical flexibility: An industrial landlord with a large footprint in a market has more ability to accommodate a business that outgrows its space than an owner of a single building does.

How is e-commerce changing what warehouse users need from industrial space?

E-commerce is built around proximity to the end consumer, since faster delivery windows require distribution points located closer to where customers live. As delivery expectations compress toward same-day and next-day service, companies increasingly need more locations spread closer to their customer base rather than fewer, centrally located warehouses.

Why does location matter so much in industrial real estate decisions?

Historically, transportation costs and labor availability and cost have been the two largest expenses associated with operating a warehouse—well ahead of rent. A location closer to the end consumer reduces distribution costs, and proximity to a strong labor pool keeps a facility adequately staffed. Power availability has more recently emerged as a comparable factor, as larger companies plan for automation and electrified fleets that require significant electrical capacity, even if that capacity isn't needed immediately.

How is power availability shaping warehouse site selection?

Power has become a more prominent consideration for tenants planning for warehouse automation or electrified fleets, but the numbers involved aren't as simple as a single "amps needed" figure. What a warehouse user initially believes they need and what a utility determines they actually need—based on real equipment and usage patterns—are often two different numbers. Utilities calculate a reasonable rate of continuous use rather than provisioning for a theoretical maximum load in which every system runs simultaneously. There's also a distinction between power available in a building's existing panel and power that could be delivered with infrastructure upgrades, such as a larger transformer—upgrades that carry substantial costs on both the utility side and the tenant's side.

What is the impact of rising construction and operating costs on industrial lease rates?

As construction costs rise, rents have to rise as well for developers and landlords to justify new construction and deliver acceptable returns to investors. When rents can't support those returns, new industrial development slows—a dynamic that has limited new supply in recent years. At the same time, rent typically represents a relatively small share of a tenant's total operating costs—often in the range of 5% to 10%. That means a well-located building can often justify a higher rent than a lower-cost alternative once transportation and labor savings are factored in, and rising rents on new Class-A industrial properties tend to lift rents across existing buildings in a market as well.

What do businesses often overlook when signing their first warehouse lease?

A few recurring issues stand out:

• Renewal options that aren't negotiated or clearly defined
• Capital expenditure responsibilities, such as who pays for roof or parking lot repairs and how those costs are amortized and reimbursed
• Move-in condition documentation that isn't clearly spelled out, which can leave a tenant responsible for pre-existing issues when it comes time to move out

Clearly documenting the condition of a warehouse space at move-in helps businesses avoid disputes over repair and replacement costs later in the lease term.

Is warehouse automation, such as AS/RS systems and autonomous mobile robots, changing the physical requirements tenants have for warehouse space?

Interest in warehouse automation is real, but adoption of newer technology remains limited by cost. These systems are expensive and often highly specialized, meaning a system built for one purpose can lose most of its value if a tenant's operational needs change. Few industrial buildings currently house any advanced form of automation, and that adoption is concentrated among the largest, most well-capitalized retailers, 3PLs and e-commerce companies with the scale and throughput to offset the investment. The technology is becoming somewhat more generalized and accessible over time, but it remains out of reach for most warehouse users for the foreseeable future.

Explore Link Logistics' portfolio of warehouse and distribution space for lease to learn more about industrial real estate opportunities across North America.