What to Look for in an Office Space
April 20, 2016
The Do’s and Don’ts
Moving or renovating existing office space in the commercial world is almost always the after effect of an organization’s need for change. Both present many logistical challenges and can often be a daunting prospect but by keeping your company’s objectives clear, the overall process defined and the goals for how to improve your workspace as your guide, moving or renovating can improve efficiencies, refresh corporate culture and renew pride in the workplace and commitment towards success.
Below are some essential Dos and Don’ts when faced with an upcoming move or renovation.
- HAVE CONCRETE OBJECTIVES
What are your reasons for moving and what problems do you hope to solve by changing or updating space? Knowing the positive impact that you want the move or refresh to have for your organization will give you direction.
- PLAN FOR GROWTH
Your new space should support your projected growth. Not starting with enough space or overcrowding before your lease is up can undo the effort and planning that you’ve initially put into the significant investment of moving or renovating.
- CONSIDER HIRING A TENANT BROKER
This is especially true if you are a mid-size or large business or are looking for a specialized space; many commercial space opportunities will never show up in an online search. Hire someone with a line on the market who can represent your needs and keep his or her ear to the ground on your behalf. Vet potential candidates to find the one that is the most competent with the best understanding of your company’s needs.
- UNDERSTAND THE ROLES OF THE KEY PLAYERS
In a commercial real estate deal, it’s essential to be familiar with the roles of the tenant, the tenant broker, the landlord and the landlord agent/listing broker. The tenant is the one signing the lease and the tenant broker represents the tenant in the office space search. The landlord owns the property and the landlord agent/listing broker markets and leases the space on behalf of the landlord. Depending on the size of your company, you will either interface directly with the landlord or via your tenant broker.
- KNOW THE DIFFERENT TYPES OF LEASE OPTIONS
There are several crucial types of commercial leases. Familiarity with the proposed office lease structure is vital when choosing your space. Ultimately, the lease needs to protect the interests of your company and you may want to hire a real estate lawyer to review it. Be on the lookout for expenses beyond the per-square-foot rental price and ask if utilities and/or common area maintenance are included in your lease. You certainly want to be prepared if they aren’t.
- CONSIDER LAYOUT, NOT JUST OVERALL SPACE
As crucial as overall square footage, an effective layout is vital for productivity, retention, etc. If you like the space you’ve found but find the existing layout unsuitable, inquire about tenant improvement, which might be a cost that your landlord will assist with, especially if you’ve agreed to a long-term lease.
- KNOW WHAT QUESTIONS TO ASK
What are the building hours? When was the building constructed? Are conference areas shared between organizations or do individual suites contain conference space? Is there on-site parking and is it reserved or open; how much does it cost? How is the central air and heating controlled? What are the current year’s estimated operating expenses and how are they passed on to each tenant? Is there an option to expand into more space during a lease term? How is maintenance handled, (is it on-site?); who is in charge and how do you contact them? When and where is the rent paid each month and does the landlord charge late fees?
- START TOO LATE
If you begin the process of negotiating or looking for a new lease too late, your company may have to wind up settling for something that’s not the right fit, reducing the value of your moving investment. You might wind up being stuck in the current space, forced to make slapdash improvements to an area that simply doesn’t have the room to sustain productive work, that adds obstacles to efficiency. An ineffective workplace could increase churn and cost your organization some of their best and brightest while keeping the incoming talent pool slim.
- ONLY FOCUS ON THE COST OF EACH SPACE
When making a real estate investment or signing a lease, there are many attributes that contribute to your organization’s success in the space, not just the bottom line monthly payment. Is there potential for growth? Does the space allow you to improve productivity? Your office space also helps you attract and retain key talent and is a representation of your organization to your clients.
- FAIL TO APPOINT A PROJECT LEADER
Office space is a crucial issue to any organization and sometimes the voices and opinions can be overwhelming. Appoint a single point of contact for the project who will keep the process on track and focused so that it won’t spiral into chaos and inaction.
- GET YOUR COMPANY’S SPACE REQUIREMENTS WRONG
Changing locations only to find that the quarters are tighter or less efficient for everyone is a bad move. But too much space and the rent starts to needlessly eat up money. This consideration is especially important for startups. Startups especially need to be realistic and account for growth but also be thrifty.
- MISCALCULATE THE RENT
Three key factors determine how office rent should be calculated and negotiated: usable square footage, common area factor and rentable square footage. Usable square footage is the space that you will actually use; “carpetable” square footage is another term for this that harkens to the concept of usable square footage being anywhere that the tenant could put down carpet. Common area factor is the cost associated with maintaining shareable space, such as hallways, restrooms, kitchens, lobby and other spaces that are used by multiple tenants. Rentable square footage is the sum of usable square footage and common area space: the total accessible space your company would be using. Understand how the rental rate is calculated and quoted.
Like change in general, moving or renovating can be tough but often pays off. Physical space can have a surprisingly heavy role in defining departmental interaction, corporate hierarchy, workstyles and many other factors within an organization. Viewing this change as a time to refocus, renew and redefine the interactions within your office, the corporate culture that best promotes your company values and the efficiencies within your workplace help to make the most of your investment and ensure a successful new chapter.