When searching for the most suitable office for your company, it’s important to consider the building class type. While the class type is often overlooked by tenants, its actually an important factor to determine and compare one building to another. When the class is taken into consideration and understood, one will find there is a big difference.
Office buildings are classified into three categories (A, B, and C). The class can be determined by age, amenities, technology capabilities, quality of HVAC systems, landscaping and how well the building has been maintained.
These buildings are considered the highest quality available and state of the art. This is due to their modern architecture, sound infrastructure, well functioning HVAC system, professional management, tighter security and altogether well manicured appearance. Generally, these buildings will be under 10 years old. Thus, a Class A building or office space will be the most expensive.
These buildings are still high quality, but may be a little out-dated. The average age will be between 10 and 20 years. Even in this case many tenants and/or landlords find these buildings to be a good investment. The technology capabilities may not be best in class, but typically will suffice. Security may or may not be on staff and typically it is not required to check in, in order to reach the space. While the amenities of Class B spaces rank average, with some facade work, a bit of interior redesign, along with an upgrade in management these buildings and spaces have the potential to be converted to a Class A status.
This class varies depending upon location (city, suburb, town, etc). These buildings are generally 20 years old at minimum. Some may be well kept, however, normally these buildings will lack many modern amenities. Technology will be lower quality and the HVAC system may not function well. In addition, this could include old elevators and mechanical systems, moderately run-down parking lots, and out-of-date furnishings. These buildings will not have security staff or food available on the premises.
Qualification is essential when looking to lease a commercial space for your business. You and your new landlord will be making an investment in each other so it’s important to prove to the landlord that you are up for the financial commitment of the move and setting up of the new space.
Landlords must be reassured of the qualifications of their potential tenant. The landlord should be looked at as a bank. The landlord is going to invest funds, resources and time into the tenant. Therefore, like a bank, they need to be reassured that they are lending to a financially stable and professional company to ensure that rent will be paid and the building will be properly maintained.
Proving that your company is qualified to rent takes more than a good credit score. Commercial real estate is generally far more expensive than residential real estate, therefore more proof of qualification is needed. Landlords want to see income, profitability and cash flow, previous year’s tax returns and sources of financing and securitization, if a newer entity. Landlords are reluctant to enter a lease agreement with a business without knowledge of operating history, positive cash flow or strong financial backing, especially if an entity is less than two years old.
Before searching for a commercial space for your company, make sure your financials are in order, you are searching for a space within your price range and have proof of your qualifications readily available for your potential landlord.
Searching for and leasing a commercial space for your business is a process, to say the least. To make the most out of your process with the least amount of agony, there are a few tips for finding a great commercial space and simplifying the process.
Know What You Want
To know what you want out of a space, you need to evaluate your business. It’s important to know where your clients and employees are coming from so an appropriate location can be chosen. You should also decide whether you want to be in a large, high-rise building, a small low-rise loft or something in between. All of these decisions are based on company preference, and when you know what you want, the process of moving becomes a much less overwhelming.
Decide what’s important
Important decisions always override preferences. Price and lease type are major factors when you are deciding what’s important for your new space. The company should be closely evaluated before deciding the essentials. If a company has major potential for expansion, consider this when deciding on the size of your new space.
Do your homework & Come Prepared
Work done in advance will speed up and smooth out the stressful process of finding a space. For example, prepare your financial statement before the ball gets rolling – a financial statement will be required at some point in the process. Be sure to have all of the necessary questions ready when you meet with your broker. This will help to avoid jumbled communication.
Use a Broker
Finding a space, figuring out the details of a lease agreement and making sure you will be paying the right price requires a professional. It’s important to hire a broker who can guide you through the long and sometimes complicated process of finding prime commercial real estate. There are a lot of long and drawn out steps before leasing a new commercial space. Dealing with this and trying to run a business can be overwhelming. Hiring a broker will ensure company satisfaction and a painless process.