How to rent out warehouse space

Decide what you are offering

“Warehouse space” can mean very different products. Pick one before you do anything else, because each needs different preparation and paperwork. The rent-out planner takes your building size and your own needs, shows the rentable portion in 3D, estimates pallet capacity and suggests ways to offer it.

• The whole building, if you are moving out or bought it to hold. See lease the building, or a sale-leaseback if you want to stay and free up capital
• A demised unit: a separated part of the building with its own entrance. See lease out a unit
• Surplus space in a building you lease. See sublease your surplus
• Part of a shared floor, or pallet storage: users share your space without walls. See short-term licence
• Event and production days: shoots, pop-ups and events by the day. See events and shoots

Check your rights first

If you lease the building, most commercial leases require landlord consent to sublet or assign. The clause often says consent is not to be unreasonably withheld, but leases vary: some give the landlord a right to take the space back, or a share of any profit on sublease rent. You usually stay liable under your lease after subletting. See getting sublease consent.

If you own it, check your mortgage terms, which may cover leasing, and in an industrial condo the corporation's bylaws on leasing and use. Either way, confirm with the municipality that the user's intended use fits the land-use district. A change of use, such as events, retail or assembly, can require a development permit and a building permit.

Tell your insurer before anyone else occupies the space. A new occupant or a new use can change your coverage.

Prepare the space

Users pay for space that works on day one. Depending on what you offer, you may need:

• Separation: a demising wall, fencing or a marked floor area, and fire separation where the code requires it
• Access: a separate entrance or door, keys or codes, and rules for shared loading
• Services: a washroom the user can reach, heat, lighting and power, ideally separately metered
• Safety: working sprinklers, alarms, extinguishers, exits and clear aisles
• Condition: roof, doors and floor in good order, and the space clean

Choose a licence or a lease

A licence grants permission to use space without exclusive possession, which is typical for shared floors, pallet storage and event days. A lease grants exclusive possession of defined premises for a term, which is typical for a demised unit or a whole building. The label on the document doesn't decide which it is; the substance does.

The difference affects your right to enter, how the arrangement can end, and how you recover the space. See licence vs lease and preparing a warehouse to rent, and have a lawyer draft or review the agreement.

Work out what you can charge

Set the price structure first, then the number. These drive what you can charge:

• How much exclusivity and control the user gets: a walled unit is worth more than a marked floor area
• The term: flexibility usually costs the user more each month, and a long commitment usually earns a better rate
• What is included: heat, power, forklift, receiving, security or cleaning
• The loading, clear height, yard and power the user can actually use
• Location and access to truck routes
• Your own costs to prepare, manage and insure the space
• What similar arrangements nearby offer, compared like for like

Price structures and tax

Structures differ by arrangement. A lease is often base rent plus additional rent; a shared floor may be a monthly fee by area; pallet storage is commonly priced per pallet position per period plus handling; event space is by the day or hour.

Commercial rent is generally subject to GST. Ask your accountant whether you need to register and collect it, and make every quote say whether GST is included or extra.

Market it, screen users and manage it

Describe the space the way users search: size, doors, clear height, power, yard, access hours, what is included, and the arrangement on offer. Photograph the doors, floor, yard and entrance, not just the office. Use listing platforms and online marketplaces, signage, your industry network or a commercial real estate brokerage.

Screen before you commit. Ask what the user will store and do, their vehicles and hours, whether anything is hazardous, and what insurance they carry, then check their business and financial standing in proportion to the commitment. See how to screen a warehouse tenant.

Put every arrangement in writing, even a short one, covering the space, term, fees, inclusions, permitted use, access, insurance, damage, restoration and how it ends. Commercial general liability insurance with you named as an additional insured is a common requirement. Then manage it: keep shared areas clear, track payments, inspect periodically, renew insurance certificates, and record the space's condition at the start and end of every term. If leasing out becomes the main plan for the building, the sell or lease out tool compares it with selling.

Before you offer space

• Decide exactly what you are offering, and for how long
• Confirm your right to offer it under your lease, mortgage or condo bylaws
• Get landlord consent in writing if you lease the building
• Confirm the user's use fits the land-use district
• Tell your insurer and confirm coverage
• Separate, secure and service the space
• Choose a licence or lease, and have the agreement reviewed
• Set a price structure and what it includes
• Ask your accountant about GST
• Screen each user and collect insurance certificates
• Record the condition of the space before and after each term