Need office space? These four steps will help you make the right decision.
The office space you choose for your business and how you go about selecting it has a direct impact on your company’s bottom line – and not just from an occupancy cost perspective. The space’s location, size and design will impact your recruitment, employee retention, productivity and customer attrition.
Looking for office space is a time-consuming process that can also be intimidating and confusing, especially if you’re new to the process. Consider these four tips for finding the right space for your business and maximizing your efforts in Charlotte’s current landlord-friendly market.
1. Level the Playing Field.
Don’t get tricked into thinking that negotiating the deal on your own will save you money if the landlord isn’t paying the broker’s commission. The opportunity cost doesn’t play out. Time spent away from your business dealing with lease will cost you money. Not knowing the market fundamentals, lease comps, and what other people are actually paying for space puts you at a disadvantage. You can’t negotiate the best deal without the market intel and experience of a commercial real estate broker and other trusted professionals like a good real estate attorney, project manager, and architect. It’s a team effort, and your tenant rep broker is the best way to be sure you’ve got an expert in your corner.
If you’re not already familiar with it, Tenant Representation is a commercial real estate specialty where the Tenant Rep broker is focused solely on the needs of the tenant or buyer of an office space rather than being beholden to the Landlord or Seller. Just as a residential Buyer’s Agent is paid by the Seller of a home, so is an Office Tenant Rep paid by the Landlord or Seller of commercial space – so there is no fee to the tenant for this service. Engaging an expert tenant rep broker who can be your advocate through the entire transaction will minimize business disruption and give you the peace of mind in knowing that you have a real estate partner with a fiduciary responsibility to get you the best possible deal in the market by leaving no stone unturned.
2. Time is Your Best Friend.
Is it time to find your business new space? Or do you want to stay where you are and right-size? The general rule of thumb is to allow yourself at least eight to 12 months prior to your renewal notice date or expiration date to evaluate your options. More time gives you more leverage when negotiating with landlords. Not only is it a tight office market, the construction market is booming, too. You’ve got to allow yourself enough time to find the right space, customize it to suit your needs and competitively bid the work and navigate the permit process. The more time you allow, the more you’ll enjoy the process and be confident with your final decision.
3. Know Your Needs.
Just how much space do you really need? Thoughtful and deliberate planning before you start asking landlords for proposals will save you time and money. Know ahead of time if you plan to grow, if you will allow work-from-home options, and how many private offices and conference rooms would be best for your team. Also, consider how long you plan to stay in the area. Longer leases (at least five years) mean better lease rates, but there are still some opportunities for short-term leases on space scattered throughout the city. Consider your current business model and plans for expansion. A good tenant rep can also help you find an architect to help you create an ideal layout accordingly.
Where do you want to be? A tech start-up might want to be in a booming urban submarket like Southend, but a wealth management firm might want to be situated in Midtown so their clients commuting to and from Uptown can easily access their space. A law firm with a focus on South Charlotte and the South Carolina suburbs would probably be better suited for the SouthPark or Ballantyne areas. Decide what’s most important in terms of location: your current and future employees’ commutes, proximity to clients, visibility, attracting and recruiting a talented workforce, walkable amenities, access to free parking or public transportation/highways/airport, etc.
4. Understand Your Finances and Set Your Limits.
What are your existing and future expenses? Establish a realistic budget for monthly rent after weighing in all other upfront/out-of-pocket business costs and expenses such as security deposit, construction for buildout or upfit, furniture, hiring, parking fees, cost of moving, etc.
What’s your financial situation like? The financial strength and history of your company will determine the type/form of financial security (or combination thereof) a landlord will require to minimize their risks. Consider your historical track record of financials, the age of your company, and your future financial growth and stability. If you are a start-up you can expect the landlord to ask for something more than the typical one month’s rent security deposit.
Don’t suffer from the business disruption caused by trying to find space or negotiate an office lease renewal on your own. Get your company on equal footing with your landlord or seller by engaging a tenant rep broker to represent your company’s best interests in this serious financial investment. Landlords are represented by qualified brokers negotiating on their behalf and a tenant rep broker will have your company’s best interest front and center, advocating and negotiating for your business.
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