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10 Commercial Office Leasing Tips

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10 Commercial Office Leasing Tips

The commercial office search and lease negotiation process can be stressful and time consuming for any company. Following these tips can help to simplify the process and ensure that you receive the right space for your needs with a fair deal

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10 Commercial Office Leasing Tips

  1. 1. Lease Yourself Plenty of Time Many companies underestimate how long it will take to find the perfect space and reach a fair rental agreement with their prospective landlord. As a result, they end up rushing through the process and may miss out on the right location or end up with a lackluster deal. Start your search process as early as possible. Beginning the process up to a year before your intended move-in date is wise. The search and negotiation process for commercial real estate is much longer and more arduous than residential real estate. Ideally, you should begin thinking about your next move a year before your current lease is due to ensure that you have plenty of time to locate the perfect space and negotiate a fair deal. 1 Number 1 www.reoptimizer.com When To Start Looking for Your Next Lease
  2. 2. Go With A Pro If you truly want to get the best space for your business needs and your budget, you need to invest plenty of hours familiarizing yourself with the market and searching through listings to find properties that are a good match. A tenant rep broker will take over the responsibilities for you, so you can focus on running your business, not following the commercial real estate market. Tenant rep brokers are invaluable assets during every phase of the office space search and leasing process. Brokers can get you into exclusive spaces, recommend locations that are ideal for your needs and give you an edge at the negotiation table. Best of all, their services are paid for by landlords. 2 Number 2 www.reoptimizer.com The Importance of a Tenant Rep Broker
  3. 3. Don’t Over Rent Get real about how much square footage you'll actually need for your company. While it is a good idea to leave a little room for growth, over renting is a costly mistake. It’s also a good idea to know the difference between usable square footage and rentable square footage. When you are comparing spaces between buildings, it's important that you look at the usable square footage rather than the rentable square footage, so that you know how much space you will actually have available. Two buildings with equal rental square footages may have very different usable square footage rates. In these cases, the ones with the lower common area factors will give you more usable office space for your money. 3 Number 3 www.reoptimizer.com
  4. 4. Prioritize Concessions Before you begin negotiating, make a list of all of the concessions and perks you hope to gain in your lease agreement. Place them into "deal breaker", "highly desired" and "would be nice" categories so you'll know what to fight hardest for during negotiations. Forfeiture of rights can also be an important thing to look out for. In an ideal world, you'd be able to move into a commercial space in good faith, believing that your landlord would keep up their end of the terms outlined in the contract. Unfortunately, you can encounter everything from unscrupulous landlords to unforeseeable circumstances after you move in. If a disaster happens or your landlord turns out to be dishonest, you need to be able to take some type of action. That's why it's important to never sign a contract that says you waive your legal rights to take any type of action against your landlord. 4 Number 4 www.reoptimizer.com
  5. 5. Consider Time Frame Carefully A long-term lease will give you leverage at the negotiation table and can help you get more of those "highly desired" and "would be nice" concessions. Still, if your company's future is uncertain, a long-term lease just may not be practical. Ultimately, your company's needs determine the best structure. If you need flexibility, a short lease is best. Otherwise, long leases are typically the most affordable option. A long lease can also be strategic when your local real estate market is going through a period of high vacancy. That way, you can lock in low rents while landlords are motivated to do anything to find tenants.
 5 Number 5 www.reoptimizer.com Short Vs. Long Term Leases
  6. 6. Make It a Team Effort Consult your team before you begin looking for office space. Get input from executives and managers to learn what they consider top priorities for your space. Conduct a survey to find out what types of amenities your employees would benefit from, how they commute to and from work and what types of businesses and services they would like to have nearby their work location. Each member of your leadership team brings a different perspective to the search process. By involving upper management, you can ensure that the space you choose will provide the ideal working environment for your entire team. Involve every employee with a survey to establish what perks and amenities matter most to everyone. 6 Number 6 www.reoptimizer.com
  7. 7. Think Beyond the Building Don't focus your attention only on the office and shared spaces within the building. Think about the parking lot, signage and neighborhood carefully before moving forward with any lease. It's also wise to research the other companies in the building and to introduce yourself to the neighbors ahead of time.
 Parking Some leases will outline how many parking spaces are allotted to your team and any visitors that might come to your office. If yours has this type of language, assess whether or not the required number of spaces will be enough. Also, find out if and how those spaces will be reserved for your team. Being entitled to parking in a small lot will not do you any good if unauthorized people are not prevented from parking in the spaces.
 Signage There is no guarantee that a landlord will provide any tenant signage. In some areas, zoning does not permit any signage at all, leaving landlords unable to 7 Number 7 www.reoptimizer.com
  8. 8. advertise the names of tenants. The number of names that can appear on a building or marquee may also be restricted by space and size or by existing agreements with other tenants.
 Amenities When it comes to your office space, a well-lit copy room and a water cooler won't cut it anymore. While many of the changes in expected amenity loads are coming from the Millennials, your CFO also plays a role. Many of these amenities make both happy by creating an office space that is more open and collaborative, but also more space and cost efficient. 8 5 Office Amenities To Look For Space
  9. 9. Take Technology into Account Analyze the office space through the eyes of your IT department. Is the wiring sufficient for your network? Will you need wireless boosters for coverage throughout the office? Are there enough plugs for charging mobile devices and laptops located throughout the space? Technology plays a big role, make sure you take this into account. Our mobile devices, computers, automobiles and household electronics and appliances are constantly evolving as technology continues to advance and open the door to new features and functionality. The lighting fast advancement of tech is also impacting the business world in new and exciting ways. New technologies are even shaping commercial real estate, setting the stage for office spaces that are more advanced than ever before.  9 Number 8 www.reoptimizer.com
  10. 10. Provide Room for an Exit If you're opting for a long-term lease, fight for some flexibility. Having the right to sublease or assign your space or to terminate your lease early at a certain time or under certain conditions could save you money in the future. Liberal subletting and assignment rights can be very beneficial if you find yourself not needing all of your available square footage or end up having to relocate before your lease is up. These clauses guarantee you the right to offer all or part of your space to another company. 10 Number 9 www.reoptimizer.com
  11. 11. Be Willing and Able to Walk Make sure that you have a Plan B in place even as you proceed with the rental process. Should a prospective landlord be unwilling to provide your deal breaker concessions, you won't have to start over from scratch if you walk away from the table. 11 Number 10 www.reoptimizer.com Top Deal Breakers for Tenants in CRE 5 Rights That Corporate Tenants Have Here are a few other articles to check out: Commercial Leasing Mistakes to Avoid
  12. 12. Other great Resources For great commercial real estate & tenant tips: View REoptimizer®’s other great resources: Follow us on social media: © 2007-2018 REoptimizer, Inc. All Rights Reserved. 12 Learn More Subscribe to our Blog Explore our Resources www.reoptimizer.com

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