Is your company looking to expand into a new office space?
If you are leading the charge in the process of finding new office space to move into, then this article will outline the important steps you should follow to find the perfect new digs for your business.
1. Start early
It’s more advantageous to start your office space search early, at least 6 months to a year before your current lease ends.
Touring sites, negotiating leases, physically moving equipment, and other logistics takes time. The last thing you want to be doing at the last minute when your lease is up is to make a rush decision without doing all your due diligence.
Also, this last-minute rush might disrupt your day-to-day business operations and add to what might be an already stressful situation, making this search for new office space a much more challenging process than it has to be.
Prevent this avoidable situation from happening by getting a jump on your search sooner rather than later.
2. Determine your needs and budget
In addition to thinking about your space requirements for your new office space, you should also consider how much you can budget towards the monthly rent and any pass-through charges, including utilities, common area maintenance fees, insurances, and other costs.
Don’t forget parking requirements, travel time for essential staff, and of course, LOCATION. Do you want to be close to other businesses in a central location or do you prefer to be in the suburbs?
These are just a few of the questions you’ll need to ask yourself when determining your potential new location for an office. If your business also has other needs like storage or a loading dock, you’ll want to figure these into your budgeting as well.
3. Take a look at what’s available online
Another great resource for checking out local available office space is Craigslist.
When I work with clients who are looking at these websites to learn more about office space for lease in the area, I always caution them to know that these online listings tell only part of the story.
There is no substitute for actually seeing the space in person, touring the grounds, and checking out the neighborhood. Plus, not every available office property may be available for viewing online.
Which brings me to my next important point on how to find good commercial office space for your business…
4. Work with a tenant representative to help you find office space and negotiate the lease
If you’re searching for office space, you’ll dramatically increase your chances of finding the right space if you work with a commercial real estate agent who specializes in working with tenants to find a new location (also called a “tenant representative” or “tenant rep”).
Some people may think that working with a tenant rep agent to find new office space is an additional cost, but this is not true.
In most cases, the fee for a tenant rep is typically paid by the landlord, and not the tenant. In other words, the fee is already built into the rental rate for the office.
So if the service is already paid for, it makes a lot of sense to work with a tenant rep to help coordinate and set up site visits with landlords and leasing agents, advise on the features of the prospective office space, and help with negotiating your tenant improvement allowances and lease terms.
For a more in-depth look into the benefits of working with a tenant rep to find new space, check out this article:
5. Visit potential spaces and look at what’s available, take notes, ask questions
On your site tour, your tenant rep should provide you with detailed property reports on each office space you visit, including square footage, pass-through net charges, and other important features your company needs.
During site tours of office space, the landlord or leasing agent leads the tours. However, the tenant representative should accompany the tour and offer advice and clarification when needed to ensure the space fits the needs of the tenant.
After the tour, you’ll want to discuss the features of each potential new office and narrow down your options until you find the perfect space.
6. Work with your tenant rep to draft an LOI and negotiate the lease
Once you find the right office space for your business, ask your tenant rep to complete a Letter of Intent (LOI), which outlines your desired requirements, terms of the lease, and other specifications your company needs in the new location.
After your tenant rep submits the LOI to the landlord and it is accepted, the negotiation process begins to determine what each side of the transaction needs to do to get the lease signed and the office filled.
Be prepared for a lot of back-and-forth as you work with your tenant rep to negotiate towards a fair deal to lease the office space. Again, this is an area that will take some time (count on at least a few weeks or even a few months) until an agreement is reached.
Finding new office space for your business is not a hard process if you follow the right steps outlined in this article.
As long as you start early, work with a knowledgeable tenant rep, and keep a positive outlook in knowing the perfect office space is out there for your company (you just need to observe it to make it a reality), then you will find the office space search to be an enlightening and rewarding experience that will help you in future expansions.
James K. Kim
James K. Kim (Jim) is a commercial real estate advisor with Pyramid Brokerage Company of Albany, Inc. in the Capital Region of New York, specializing in helping business owners expand into new locations or sell/lease a commercial retail, office, industrial, or investment property.