Written by: Chad Graham Founder of Graham Commercial Real Estate
The idea of searching for a new office space can spark excitement, in contrast it sends some business owners running to the hills. It doesn’t matter if you are an established business seeking a new location or expansion, or a new business opening your doors for the first time- the same goal is shared: to find the “Perfect” office space.
Often the office search is led by how much the monthly rent is, and square footage. Although extremely important, these should not be the only Today the standard landlord requires a three to five-year lease, this means you need to choose a space that suits your business today, and will work progressively with you over the next three to five years.
You are planning for your future growth. While you don’t need all the answers, having answers to things like is this helps the decision making process: is this the most ideal location for customers and employees, is there opportunity for efficiency, how much parking is included, what are the hidden costs, what type of building systems are in place, and does this space offer room for expansion.
Graham Commercial Real Estate understands the challenges you face, we’ve been there and done that with hundreds of clients. We strive to educate tenants on all components to consider when leasing an office space. Our team compiled a list of ten questions to ask yourself before leasing a space for your office.
- What are the economics?
Economics for an office space include more than just the monthly rent figure. It includes the rent, utilities, additional fees (often called CAM charges), length of lease your financially locked into, insurance costs, and any additional costs pertaining to the building. Is your monthly rent in alignment with current market rates? What happens if you can’t fulfill your lease- can you sublease?
- Does this office send the right signal about my business?
Does it leave the impression I’m striving to leave with my clients? Does it attract my type of clients? Consider your brand and your clients, does this the space and your brand align? If your a business that serves high-end clientele, is the building lavish- are your diggs so sparse that clients who visit wonder if your about to file bankruptcy?
- Will the location be convenient for our employees?
Finding great employees is a huge challenge, its important to keep them happy. Picking up and moving 30 minutes from your previous location, where multiple employees biked to work everyday may present vacancies within your company simply because a long commute. Invite your key staff to weigh in and participate in the search so you don’t risk loosing them. If you do end up making a long move, this offers an opportunity for the staff to think of solutions the company could offer to overcome the objective, such as a bus pass or setting up company car pooling.
- Where are our clients, is our office convenient for them?
Taking your clientele into location consideration is as important as planning for your employees. Are your clients based on the east side of the city but your considering a move to the west side? You may loose some of your client base simply because your location wasn’t convenient and close. Some of the solutions we have suggested to clients are moving to the middle marker as a compromise, in the case of east and west a move to midtown would resolve this issue. Or, if your more on the techy side offering your clients GoTo Meetings, or Skype Calls may be both a solution and time saving strategy.
- Are we able to operate efficiently here?
The common misconception is to look only to the interior walls of a space for the answer. Efficiency refers to the load factor for the square footage, the common area obstacles your business may have to overcome, and overall layout. One space could be 10,000 square feet but have a 20% load factor, meaning one fifth of your leased space is unusable for your business- it is made up of restrooms, hallways, and elevator lobbies. It may have a lower price tag, and the same amount of space you will be leasing but in comparison to another 10,000 square foot space with a 12% load factor- the space with a 20% load factor will offer much less space for offices, conference rooms, ect. One fits 50 desks, while the other just 42.
- Does this offer enough space for business growth?
We commonly see businesses a) lease a tiny space because they are afraid they won’t be able to afford the rent then have to lease a second smaller space and have leases staggered or b) lease way too much space, we recommend planning for growth but plan within the profits you project for the next year. Start with a smaller amount of extra space to begin with. Best case scenario, discuss with the potential landlord the idea of expansion- if you needed to expand and they had additional space on the property would they be willing to break your current lease and lease you a larger space or do they have other properties where you could expand?
- Who manages the property? How do you reach them? How is their responsiveness?
Property managers are tenants’ primary point of contact with the building owner. A property manager will often give you the best case scenario, the easiest way to learn about the management style is by asking the other tenants. Inquire about their responsiveness and quality of the property manager. If amenities are included within rent, refuse for example- inquire about the service. Don’t be afraid to ask what they both really like about being there and what they don’t like. This gives you some insight before signing on the dotted line.
- What is the parking situation?
It’s important to consider the amount of parking available at your proposed location, as well as learn if there are additional costs for your employees and customers to park. If parking is tight, is there a place where employees can park so customers get the most convenient spaces? Parking is one of American drivers largest complaints. You may not have employees or customers for long if parking is extremely tight.
- Is the property manager willing to lease to you with a non-compete clause for future tenants built into your lease?
This is not something typically thought about by business owners. We see them look around in the area for the competition but never consider that someone who does the same thing could move in next door. Not the best scenario. An experienced Commercial Realtor knows to look for non-compete or similar business clauses- if you don’t see it on the lease inquire about it.
- What do I love about this space?
Make note of every space you walk through, record things you like, things you absolutely do not want in your space. Do you love the light that comes in through many windows? Or, the open concept layout? After viewing a space, record what you love. The next day pull out your list and see if the things you love about the space will serve your business or if they are more of a personal joy. This ensures you get exactly what you want.
We hope these Ten Questions to Ask Yourself Before Leasing Space for an Office have provided you valuable insight and will guide you on your search for the perfect office space. Our team at Graham Commercial Real Estate has been leasing in Alaska for nearly twenty years, we would love the opportunity to find you the perfect office space. Call us today at 907-727-5001
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