Warehouse and Industrial Makegood Negotiations

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Negotiating your warehouse makegood obligation is an incredibly important aspect of leasing a new space. Ensuring you’re in a strong position can have significant financial benefits for tenants. On the other hand, if you find that you’re nearing the end of your lease and are not in a favourable position, you should consider hiring expert negotiators. 

Makegood clauses often require tenants to restore the warehouse to its original condition upon vacating, which can involve costly repairs, removals, and reinstatements. If your clause is not clear, or leaves you too much to do, you may be facing a hefty bill. By partnering with Niche Tenant Advisory, you can navigate these negotiations with confidence, ensuring the best financial outcome for your business.

What is a warehouse makegood obligation?

Warehouse makegood clauses specify the tenant’s responsibilities for restoring the premises to its original condition at the end of the lease. These obligations typically include:

  • Removing racking, mezzanines, or other installed structures.
  • Repainting walls, repairing floors, and fixing any damage caused during the tenancy.
  • Restoring office areas, lighting, and electrical systems to their pre-lease state.
  • Addressing cleaning and waste removal requirements.

The broad scope of these obligations makes it crucial for tenants to negotiate terms that are clear, reasonable, and cost-effective. It’s absolutely essential that your makegood clause is as crystal clear as possible to remove any issues or disputes that may arise, particularly around the term ‘original condition’.

Negotiating makegood terms at the lease outset

The best time to address your warehouse makegood clause is during lease negotiations, before you sign your new agreement. Ensuring the terms are fair and unambiguous upfront can save you from unexpected costs when it’s time to vacate. At this point, you’re also in a much stronger position to negotiate terms.

Key considerations during lease negotiations

There are a number of factors to consider when negotiating your makegood clause and new commercial lease.

  1. Clarify expectations: Define what “makegood” entails, including specific restoration tasks and acceptable conditions for handover.
  2. Document the starting condition: A detailed condition report ensures there’s no confusion about the warehouse’s original state, avoiding disputes later.
  3. Negotiate exclusions: Advocate for the exclusion of items like wear and tear, structural repairs, or improvements that benefit the landlord.
  4. Cap liabilities: Where possible, set a financial cap on makegood obligations to limit exposure to unexpected costs.
  5. Opt for financial settlements: Some tenants negotiate to pay a fixed makegood settlement instead of carrying out physical restorations. This approach can save time and effort while providing cost certainty.

At Niche Tenant Advisory, our lease and makegood experts will work hard on your behalf to negotiate fair lease terms, leveraging our deep market knowledge to protect your interests and provide the best outcome possible.

Managing makegood obligations when vacating

At the end of a warehouse lease, executing makegood obligations can be complex and expensive if not managed carefully. If you are struggling to get a positive result at this point, expert assistance is a must. Niche Tenant Advisory helps tenants approach this stage strategically, ensuring landlords’ expectations are met without overspending.

Steps to streamline the vacating process

Here are a few steps to help make life easier when vacating your space and negotiating the terms of your makegood clause.

  1. Revisit the lease agreement: Understand the specific makegood obligations detailed in the lease.
  2. Engage professionals for an assessment: Conduct a thorough property inspection to identify the scope of work required.
  3. Plan makegood works efficiently: Use experienced contractors to perform necessary tasks, minimising disruption and costs.
  4. Negotiate disputes proactively: If disagreements arise, negotiate directly with the landlord or propose a financial settlement as an alternative to physical works.

With Niche Tenant Advisory by your side, you’ll benefit from expert negotiation skills that can help reduce or simplify makegood responsibilities. We have extensive experience negotiating for our clients, delivering better outcomes for all.

Why Niche Tenant Advisory is essential for makegood negotiations

Warehouse makegood obligations can become a financial and logistical burden without expert guidance from experienced negotiators. The team at Niche Tenant Advisory specialises in helping tenants achieve the best outcomes in every situation, ensuring obligations are manageable and aligned with market standards.

The Niche Tenant Advisory advantage

This is exactly why you should consider working with our team today for your warehouse or industrial makegood negotiation.

  • Financial savings: We negotiate terms that minimise unnecessary expenses, delivering significant cost savings.
  • Tailored strategies: Our team develops bespoke solutions based on your warehouse setup, lease terms, and business priorities.
  • Expert representation: We handle negotiations with landlords and other stakeholders, protecting your interests every step of the way.
  • Comprehensive support: From initial lease reviews to end-of-term makegood management, we guide you through the entire process.

Maximising financial outcomes with Niche Tenant Advisory

At Niche Tenant Advisory, we understand that makegood obligations can represent a substantial financial risk for warehouse tenants. Our goal is to help you achieve the most cost-effective solution, whether by reducing the scope of works, negotiating a reasonable settlement, or managing the restoration process efficiently.

Get expert help with your warehouse makegood obligations

Negotiating makegood clauses and managing end-of-lease restorations doesn’t have to be overwhelming or costly. Niche Tenant Advisory is here to safeguard your financial interests while ensuring compliance with lease terms. Speak to our friendly team today to find out more about how we can help you achieve the best outcomes for your warehouse makegood.

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