Industrial Lease Guide for East Bay Tenants

Updated February 2026 • 12 min read • By Alex Peck, CCIM

Finding and leasing the right industrial space is one of the most important decisions your business will make. The wrong building can hamper operations for years; the right one positions you for growth. This guide covers everything East Bay tenants need to know about leasing warehouse, flex, and industrial space in Contra Costa and Solano Counties—from understanding lease structures to negotiating the best terms.

East Bay Industrial Lease Market (Q4 2025)

$1.35
Avg. Asking Rent/SF NNN
4.2%
Vacancy Rate
3-5%
Annual Rent Increases
3-5 yr
Typical Lease Term

Understanding Industrial Lease Types

Before you tour a single building, understand how industrial leases are structured. The lease type determines your true occupancy cost—and surprises here can blow your budget.

NNN (Triple Net) Leases

The most common structure for industrial space. You pay base rent plus your proportionate share of property taxes, insurance, and common area maintenance (CAM). This is quoted as "NNN" or "plus NNN."

Example: A 10,000 SF space at $1.25/SF NNN with $0.35/SF in NNN expenses means your actual monthly cost is $1.60/SF, or $16,000/month—not $12,500.

Modified Gross Leases

Base rent includes some expenses (often taxes and insurance), while you pay others separately (typically utilities and janitorial). Less common in industrial but worth understanding.

Gross Leases

One all-inclusive rent covering everything. Rare in industrial—mostly seen in small flex spaces or multi-tenant buildings targeting smaller users.

Lease Type You Pay Landlord Pays Common In
Triple Net (NNN) Base rent + taxes + insurance + CAM Structure/roof (usually) Warehouse, distribution
Modified Gross Base rent + some expenses Some expenses included Flex space, R&D
Gross One flat rent All operating expenses Small flex, executive suites

Watch Out: NNN Expense Creep

NNN expenses can increase significantly over a lease term. Ask for historical NNN costs and negotiate a cap on annual increases (typically 3-5%). Without a cap, your landlord's property tax reassessment or insurance spike becomes your problem.

What to Look For in Industrial Space

Every business has unique requirements, but certain factors matter for almost all industrial users:

Clear Height

The usable vertical space from floor to the lowest obstruction (usually the bottom of roof trusses or sprinkler heads). Modern distribution requires 24-32 feet; manufacturing and workshops can often work with 16-20 feet. Higher ceilings mean more racking capacity and flexibility.

Loading Configuration

Grade-level doors: Essential for most users. Allow forklift access, direct truck loading, and flexibility. Count the doors and measure their dimensions.

Dock-high doors: Raised loading positions (typically 48" above grade) for semi-trailer loading. Critical for distribution operations receiving full truckloads.

Drive-in doors: Large doors allowing vehicles to enter the building. Important for contractors, equipment storage, and automotive uses.

Power

Verify the building has adequate electrical service for your equipment. Key questions: What's the amperage? Is it three-phase? Where are the panels located? Upgrading power is expensive—better to find a building that already has what you need.

Office Ratio

Most industrial buildings include some finished office space, typically 10-20% of total square footage. If your needs differ significantly, budget for tenant improvements (TI) to add or remove office finish.

Space Requirements Checklist

The Leasing Process: Step by Step

  1. Define Your Requirements
    Before touring, document your must-haves versus nice-to-haves. Consider current operations, growth projections, employee commute patterns, and customer/vendor access needs.
  2. Engage a Tenant Rep Broker
    A tenant representative works exclusively for you—at no cost to you (the landlord pays the commission). They'll identify options, coordinate tours, and negotiate on your behalf.
  3. Tour Properties
    Visit shortlisted spaces with key decision-makers. Bring a tape measure, take photos, and note condition issues. Ask about other tenants, building history, and landlord responsiveness.
  4. Submit a Letter of Intent (LOI)
    Once you've identified your preferred space, submit an LOI outlining proposed terms: rent, term length, tenant improvements, free rent, options to renew, etc. This begins negotiation.
  5. Negotiate Lease Terms
    Expect back-and-forth on rent, TI allowance, and other terms. Your broker handles this, pushing for concessions while keeping the deal moving.
  6. Review and Execute Lease
    Have your attorney review the final lease before signing. Pay attention to maintenance responsibilities, permitted uses, assignment/sublease rights, and default provisions.
  7. Build Out and Move In
    Coordinate tenant improvements, utility transfers, and your move. Build in buffer time—construction delays happen.

Key Lease Terms to Negotiate

Everything in a lease is negotiable. Focus your efforts on these high-impact terms:

Base Rent and Escalations

The starting rent matters, but so does how it increases. Most industrial leases include annual escalations of 3-4%. Negotiate the lowest escalation you can—over a 5-year term, the difference between 3% and 4% annual increases is significant.

Tenant Improvement Allowance

Landlords often provide a TI allowance ($/SF) for you to customize the space. This might cover office buildout, additional electrical, or specialized infrastructure. The tighter the market, the less TI you'll get—but always ask.

Free Rent

Especially for longer-term leases, landlords may offer 1-3 months of free rent upfront. This helps offset moving costs and the disruption of relocation. More common in softer markets or for credit tenants.

Options to Renew

Lock in the right to extend your lease at predetermined terms (or fair market value). Renewal options protect you from relocation costs and give you leverage if the market tightens.

Options to Expand

If adjacent space exists, negotiate a right of first refusal or first offer on that space. This preserves your ability to grow in place rather than relocating.

Early Termination Rights

Some landlords will grant an early termination option (typically with a penalty) for longer-term leases. Valuable if your business outlook is uncertain.

Pro Tip: The Best Time to Negotiate

Your leverage is highest before you sign. Once you're in the space, the landlord knows relocation is expensive and disruptive. Negotiate hard upfront—especially on renewal terms, expansion rights, and expense caps.

East Bay Submarket Overview

Lease rates and availability vary significantly across the East Bay. Here's what to expect:

Central Contra Costa (Concord, Pleasant Hill, Walnut Creek)

Tightest vacancy, highest rents. Excellent access to I-680 and Highway 4. Limited large blocks available. Expect $1.40-1.60/SF NNN for quality space.

East Contra Costa (Pittsburg, Antioch, Oakley)

More availability, lower rents ($1.10-1.35/SF NNN). Growing infrastructure but longer commutes for employees from central county. Good option if you need more space per dollar.

Martinez/Pacheco

Small submarket with limited inventory. Waterfront-adjacent properties may have specialized uses. Moderate rents ($1.20-1.40/SF NNN).

Solano County (Fairfield, Vacaville, Suisun)

Best value in the region at $0.95-1.15/SF NNN. Excellent I-80/I-680 access. Strong option for distribution operations serving both Bay Area and Sacramento markets.

Common Tenant Mistakes to Avoid

Underestimating total occupancy cost: Base rent is just the start. Add NNN expenses, utilities, janitorial, and any required insurance. Budget 25-40% above base rent for true occupancy cost.

Ignoring renewal terms: A great deal today means nothing if your rent doubles at renewal. Negotiate renewal options with capped increases upfront.

Skipping the broker: Landlords pay tenant rep commissions whether you have a broker or not. Going direct doesn't save money—it just means you negotiate alone against professionals.

Rushing the decision: Moving is expensive and disruptive. Take time to evaluate options thoroughly rather than grabbing the first available space.

Overlooking zoning: Confirm your specific use is permitted before signing. Some industrial zones restrict certain activities (outdoor storage, hazardous materials, heavy trucking).

Neglecting the lease review: Commercial leases are complex documents written to protect landlords. Have an attorney review before signing—the cost is minimal compared to the exposure.

Questions to Ask Before Signing

Before committing to any space, get clear answers on these points:

What are the actual NNN expenses? Get 2-3 years of historical data, not just estimates.

Who handles maintenance? Understand exactly what you're responsible for versus the landlord.

Are there any deed restrictions or CC&Rs? These can limit signage, parking, hours of operation, or specific uses.

What's the building's history? Any environmental issues, past uses, or known problems?

Who are the other tenants? Incompatible neighbors can create conflicts over parking, noise, or truck traffic.

What improvements will the landlord make? Get commitments for repairs or upgrades in writing before signing.

Looking for Industrial Space?

Get expert tenant representation at no cost to you. I'll help you find the right space, negotiate favorable terms, and avoid costly mistakes.

Schedule a Consultation

Alex Peck, CCIM

Alex provides tenant representation services throughout Contra Costa and Solano Counties, helping businesses find and lease industrial space. With deep market knowledge and a client-first approach, he ensures tenants get the right space at the best possible terms.

Email: apeck@lee-associates.com | Phone: (925) 930-7200