Whether you’re getting ready to move to a larger office space or planning to add a second, third, or fourth location to your portfolio, there is a lot to consider when it comes to commercial real estate leasing. Keep the following tips in mind as you move through the process to ensure the best outcome and make the process as smooth as possible:
1. Start the Process Early
The search and negotiation for commercial real estate takes much longer than most companies think. Ideally, depending on the size of your requirement, you should begin thinking about your next move at least a year before your current lease is set to expire to ensure that you have plenty of time to locate the perfect space, negotiate favorable terms and complete tenant improvements.
2. Have a Game Plan
Before you search, consider your corporate strategy and how your office space will play a role in furthering it. Develop a detailed list of criteria that will help guide your search process. What matters most in commercial real estate will depend largely on your goals.
3. Call in a CRE Pro
A commercial real estate advisor focused exclusively on tenant representation should be thought of as a must-have. A knowledgeable pro can help you discover space you otherwise would never know existed and give you an edge at the negotiating table. Even better, landlords pay commission for both sides of the transaction so there is no out-of-pocket expense to you. In addition, the commission is structured based on the assumption that there will be two brokers sharing the fee. In other words, the fee for tenant representation is already built into the cost of the space you’re looking to lease. Since you’ve essentially already paid for it, there is no reason to not get the benefit of the service.
4. Do Your Research
Knowing the market is essential in order to structure a favorable transaction. You should have a clear picture of what other companies are paying for spaces similar to the ones you are considering and what kinds of terms and concessions they’ve received. Also, dig into the reputation and history of the landlord and make sure you know who your neighbors will be in any building.
5. Make It a Team Effort
Each member of your leadership team brings a different perspective to the search process. By involving all levels of 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. Separate Needs From Wants
When you reach the negotiation phase, you need to be willing to give in order to get. That means that you must prioritize what you absolutely must have from your new office space over what would be beneficial. Doing so will help you effectively compromise.
7. Don’t Be Overly Ambitious
While it’s important to choose space that will continue to meet your needs in the future, don’t be overly ambitious. Realistically assess your potential for future growth and don’t over lease square footage. After all, you don’t want to end up paying for tons of empty space that may never be occupied.
8. Leases Are Meant To Be Negotiated
Commercial real estate lease agreements are always written to favor the landlord at the expense of tenants, and it’s assumed that after you are given the contract, you will come back to the landlord with requested changes. Simply agreeing to the original version can mean overpaying or leaving something beneficial on the table.
Consider engaging howardcommercial, a commercial real estate firm providing conflict-free advisory services to tenants, owner-occupiers and investors. Our fiduciary responsibility is to our clients and we represent them vigorously to produce superior results.
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