Searching for office space is among the most important decisions your company will make for a variety of reasons. An office is the epicenter of what your company lives and breathes.
For that reason, it is essential to ensure that you perform your due diligence when undertaking this task. We’ve reviewed four essential components that each company ought to take into account when it comes time to acquiring office space. By paying attention to several points here, you will put your company at a significant advantage.
Give yourself time. Most experts say to give yourself six months to look for office space before the anticipated move-in. Really reflect on what the most important criteria is in office space for your business. Is location important? Maybe you need to be close to shipping facilities, airports etc. If you have a fair amount of employees, you have to factor in their commuting costs/parking, etc.
You may not attract the quality employees you need if your location is far away from where a large population people live. Will customers be coming to your place of business? Again, locations close to airports and hotels may be important if this is the case. Also, what does this office space say about you and about the image of your business? If customers will not be coming to your business maybe this is an area where you can cut costs. For example, in this case you may get more space for your money with less attractive amenities.
Be clued in
This is where you are going to spend a multitude of your time. Is this somewhere you can envision coming to every day for perhaps several years? Imagine the layout of where you and your employees will be putting your desks, your files, your meeting places. Do not rely purely on square footage numbers.
Some landlords actually take their measurements of square footage from the middle or outside of exterior walls. And in older buildings, those walls can be very thick! Square footage in awkward layouts or narrow hallways may not even end up being useable space! How much space do you need now and do you anticipate a lot of growth? Some landlords will allow you to sublet space. This could be a great option in you anticipate growth but do not need some of the extra square footage at the current time.
Use an agent of your own. In the end, that agent will be paid by the landlord, not by you. They know the business and the local market. It is estimated that using an agent will save you 25% on your lease agreement. All lease agreements are negotiable. Some more than others depending on how “hot” the local market is at the time of signing the lease.
There is nothing more exciting to a landlord than an inexperienced, impulsive business owner coming to look at an office space by themselves. They will never encourage you to shop around, but instead will play on your fears concerning how quickly you can lose this particular space.
If you have given yourself time and truly narrowed down your needs and you are represented by a good agent, you will never fall prey to “the sharks.” Many landlords will not reduce monthly rental rates especially if their rates on par with the competition. However, a few months of reduced rent can often be negotiated to help cover moving costs.
Again, an agent can be worth their weight in gold in helping you understand the lease that you are signing. You are not comparing apples to apples when looking at office space. If you are signing a gross lease, your rent is paying all of your office’s operating costs.
If you are considering a net lease (sometimes called a triple net) your rent will be cheaper but costs such as utilities, taxes, insurance and maintenance will all be at your cost. Make sure you really understand what all of these costs can be and always err on the side of budgeting on the high side. It is always recommended to sign a short lease at first.
Remember, no matter what kind of lease it is, it will always favor the landlord, still you want to get the best terms you can get for yourself and your business. A short term lease gives you flexibility to move yourself to a better location, or a bigger location should your business really grow. On the flipside, if your business goes through hard times, you will not have the expense of a four year lease!
It is advised to get a short term lease with an option to renew. When you renew because you feel you have found the perfect office space for your business, you then can sign a longer term lease which is most likely to get you better terms.
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