Leasing office space can be a harrowing process however it doesn’t have to be. If you plan appropriately and follow an office leasing process you will be better situated to find the most appropriate office space for your business.
Press Release (PressBurner) Oct 10, 2009 - Leasing office space can be a harrowing process however it doesn’t have to be. If you plan appropriately and follow an office leasing process you will be better situated to find the most appropriate office space for your business and get the lowest office lease rates and best terms possible.
Whether you are leasing space for the first time, renewing your current lease, expanding, or relocating it’s important to take the time to evaluate and analyze alternatives in order to have a position of strength with landlords. To help ensure you save time and money for your company, Austin Tenant Advisors recommends the following key steps to take when leasing office space:
1. Evaluate your commercial real estate needs – This is the most important step of the process that is often overlooked. Here you need to review your existing lease and examine your goals and expectations to determine whether or not it’s more beneficial for your company to renew the existing lease, expand, or relocate the office all together. When evaluating office space needs you need to:
a. Establish your budget and project timeline
b. Determine current and future space and layout needs
c. Define ideal location parameters (must consider employee drive times, company image, etc.)
d. Identify technical and amenity requirements (Do you need a fiber lit building, showers, workout facility, etc.?)
2. Consider hiring a local office tenant representative – A local tenant representative can save you a lot of time and money and their service does not cost you anything since they split the fee that is already being paid to the listing broker of the property. Since they work in the market every day they are privy to valuable market and property information that can arm you with the knowledge necessary to find great space and negotiate the best deal. They do all the legwork researching the market and identifying every possible property that meets your specific size, location, budget, and other needs. They will help you compare and isolate the most desirable options and help create competition between landlords necessary to ensure that the lowest lease rates and best terms are negotiated.
3. Tour and Evaluate Properties – Tour the most desirable properties to evaluate the physical, operational, location and preliminary economic attributes against your criteria. Given the results of the properties you have seen, decisions can now be made on how favorably each building compares to your ideal criteria and a final list of 2-3 alternatives can be chosen.
4. Request Lease Proposals – Request lease proposals from the landlords of the top 2-3 properties that accurately address all your requirements and preferences. Make sure they address all the terms consistent with your business plan. This will enable you to make an "apples-to-apples" comparison among proposals
5. Analysis Lease Proposals – Conduct comparative lease analysis analyzing key lease and financial points such as rental rates, lease terms, operating costs, construction and rent allowances, moving and furniture costs, expansion and renewal options, etc. This arms you with clear comparisons of the proposed terms and costs, and enables you to tender creative counter-proposals.
6. Negotiate the Lease – Counter-proposals my go back and forth until you feel the landlords have proposed their best, competitive terms. Then you must identify and select the best property based on the objective and subjective criteria you initially set, and negotiate a lease that fits your company’s needs and use.
7. Finalize the Lease – Work closely with your legal counsel to negotiate the final aspects of the agreement and insure that the lease documents reflect the terms and conditions agreed upon. Lease provisions involve an enormous range of matters that can impact your company’s operating costs, comfort and well being for the years to follow.
8. Construction & Move-in Coordination – Work with the landlord, contractor, and architect to insure that the space is built out on time, and according to the specifications agreed to in the lease. Ask your tenant representative suggestions for other services providers that you will need (ie: internet, phone, movers, etc).
