The hunt for office space can be such a daunting task. This is one of the most important considerations in managing your business- in most cases it’s a make or break. Need to get this right, wouldn’t you say? Rent can be one of your biggest expenses and there are so many factors to consider: location, size, length of term, amenities, layout, and parking…I could go on. So where to even begin? To make your life easy I’ve compiled some simplified tips on how to navigate the search for new office space.
The process of finding space, negotiating the best deal, and then getting the space ready to operate your business takes much longer than you think. Ideally you should be starting the process 6 to 12 months prior to your ideal occupancy date. You don’t ever want to leave yourself at a disadvantage if the negotiations go south or if timing is off and there are limited products on the market that meet your requirements. There is also the scenario that the construction timelines to renovate your space takes longer than initially expected. This is especially tricky if you are dealing with a lease expiry date at your current location. You want to make sure to build in some flexibility in your timelines to deal with the unexpected.
I’ve written about this in detail in my post – 5 Reasons Why you Need a Commercial Realtor, but I cannot stress this enough. A Commercial Broker/Sales Representative will save you time and money, bottom line. They will give you access to everything on the market as most people are not aware that commercial listings are not as centralized as residential listings. Only a small portion of commercial real estate are listed on MLS, so a good broker will put options in front of you that you cannot find from a Google search. I also want to break a big myth: that using a broker will cost you. If you are represented by a commercial broker as a tenant or buyer, commissions are paid by the landlord or owner.
I also always recommend my clients to hire a lawyer that specializes in commercial leases. Your general or family lawyer won’t do here. Leases are complex and require an expert.
HAVE A CLEAR VISION
Come prepared with a clear vision. Think about your long and short term business needs, map out your budget and location preferences. Chat with your employees about their wants and needs so you can really understand their priorities in advance. The best case scenario is finding a preferred location central to where the bulk of your key staff live and/or somewhere that is accessible to the greater workforce. Think about your ideal floor plan and the best workflow for your operation. Is it open concept, closed offices, do you need a kitchenette etc.? Best to know this in advance so your broker can seek out the spaces that can lend itself to your perfect layout. How many work stations do you currently have and how many do you anticipate requiring in the future? This also will play into the length of term you are willing to look at. We will discuss more on that later.
KEEP AN OPEN MIND
You may have a budget and location in mind, but when you go out into the marketplace your first choice is way over your budget. It’s best to keep an open mind especially if you are budget sensitive. Let your broker put options in front of you that you may not have thought of before. Although there has been a lot of talk about how suburban business parks are ‘dead’ thanks to millennials and other contributing factors, there’s definitely something to be said for cheaper rents and better parking options.
CONSIDER ALL THE FACTORS
Most business owners are solely fixed on the rates but there are a few other major factors in your lease that you should pay close attention to as well. We touched on this above but your length of term is a big deal. It will determine the overall ‘value’ of the deal to the landlord and how much they will be willing to offer in terms of inducements. Inducements could include free rent time, improvement allowances or a break in rent at the beginning of the term.
Know your options going into a lease and work with your broker to negotiate and/or understand them up front. Would you like an option to renew? An option to sublease or assign your space? What about first rights on adjacent space in case you grow? Can you ask for a termination option? All important to understand before you put together an offer.
ENJOY THE PROCESS
I am biased here because it’s what I do every day and I love what I do, but I think this can be a really fun process. It’s exciting to picture yourself in a fresh new space. The possibilities, experiences, and growth can be endless. So go into it with a clear vision, an open mind and a positive attitude.
Need help looking for commercial space?
Sarah Vandenbelt, Broker | email@example.com