When leasing a new office space, it’s easy to look at properties that already exist, but there is an entire market of new or partially built developments that have potential to be amazing office space, if you plan accordingly. In order to navigate leasing in a new development, follow our steps for success.
Understand When Delivery Will Be and Plan Accordingly
Delivery dates can be a moving target and it’s important to nail down a date that’s as precise as possible. If you don’t have a precise date, you could end up without an office space, which could be detrimental to business. Always have a backup sublease, option to go month-to-month in your current space, or potential space on deck to ensure you have a place to continue business.
Make Sure to Have Contingencies in Place
This is important just in case things aren’t ready, aren’t working or weren’t constructed properly. Make sure your new landlord will handle a punch list of items for completion. As a tenant, it’s vital to work with a broker that can review and request contingencies in your lease to protect your rights.
Make Sure Your Budget Can Afford It
Typically new office spaces are more expensive than existing space. That’s why it’s important to understand all of the costs that are associated with leasing in a new development. From calculating costs for a potential sublease to taking on the extra costs of moving into a new development, make sure to have additional money tucked away in case the leasing process doesn’t go 100% as planned.
Ensure You Can Get Growth Rights
As your company grows, your office space will need to follow suit. This is where growth rights come in. Finding this extra space can be especially tough for smaller businesses in new developments, but working with an experienced broker can ensure that your company will be able to expand when the time comes.
Make Sure the Building has All COOs
Nothing can derail a new office move-in than the building not being up to code. Save you and your team the hassle of a delayed move-in date, and make it a point to ask your landlord to show you the necessary certifications of occupancy.
Navigating leasing in a new development can be a great opportunity for business owners as long as the proper research and precautionary measures are taken. The best way to ensure a successful lease is by working with a qualified broker to make the leasing process as smooth as possible.
The negotiation process can be intimidating, but it doesn’t have to be if you go in with the right attitude and information. Whether you’re looking to increase your salary, restructure part of your lease or save money on that new car, follow the tips below to get what you want and feel good doing it.
Know the market. When negotiating, specificity is key. Hone in on exactly what you want, and then provide reasons why you should receive it. For instance, when negotiating a higher salary, look up standard industry salaries for your position and take note of how your salary reflects that. Hard statistics strengthen why you deserve additional compensation. From there, put together a comprehensive list of your accomplishments, any projects you’ve managed and any initiatives you’ve been part of within your company, as well as any relevant outside qualifications you have. Use your hard work as leverage. A negotiation is never a time to sell yourself short.
Don’t be afraid of no. Ideally in your negotiating process you’ll get exactly what you walked in for, but the best negotiators also already have alternatives in mind. It’s essential for you to go into your meeting under the impression that you will receive your requests, but also find a few alternatives to your original offer that you would be happy with. For example, if you’re buying a home, but the realtor is not willing to budge on price, try asking for some repairs or upgrades to be covered instead. No matter what you’re negotiating, having a counter offer prepared will help ensure a successful negotiation.
If your boss doesn’t want to raise your salary and the conversation is stagnating because neither party will budge, you can offer up other ways in which you can be compensated. Try requesting benefits such as extra PTO, a gym membership or an end of year bonus. When you look at your total benefits and re-frame your requests from that perspective, your odds of a successful negotiation are much higher.
Listen. When the person you’re negotiating with is speaking, listen carefully. By asking open-ended questions and utilizing active listening, you’re setting the stage for an actual discussion instead of just a bargaining match. The more time you take to listen rather than just waiting to reply, you can get a better understanding of where the other party is coming from, and you can adjust your negotiating tactics accordingly.
The best way to successfully negotiate is to be mindful throughout the entire process – from the time you take to properly research before the meeting to the meeting itself. With the proper information and a good attitude, you’ll be able to take on any negotiation confidently and successfully.
Relocating and choosing a new office space is a lot of work, no matter the size of your company. However, it also provides an exciting opportunity to start fresh in a new space. Carefully consider the following points to ensure you get the most out of your move.
Select a location that works for both clients and employees. You want a space which clients can find easily and employees can comfortably commute to – perhaps close to public transportation or with a parking lot if many clients and employees will drive to reach you. Consider where your key employees live and whether the space is convenient for them.
Find a space that doesn’t stretch your finances too thin. Make sure to calculate the full cost of the space and consider any hidden costs carefully to make sure nothing sneaks up on you (parking, utilities, any necessary construction, taxes, phone & data set up, janitorial, new furniture, etc).
Look for a space that will allow room for growth. Opt for a space that could potentially accommodate a growing team or evolve with your business. Also, check that any new space has sufficient area to allow for breaks and group or client meetings.
As you evaluate your options, look for a space with easy-to-use and secure IT systems, particularly if you need a reliable internet connection for your business to function properly. Understand and test the current technological infrastructure of each space you consider to ensure it can accommodate your business needs or if a potentially expensive build-out may be required.
Think about what amenities you’d like your new space to offer employees. Sunshine can be a great easy perk as access to natural light can affect mood, energy levels and alertness. See if your new location has space for a stocked beverage center or coffee bar. Also, consider investing in employees’ health with an on-site fitness center or dedicated wellness room.
Where you work matters. That’s why we’ve partnered with an online software platform to make it easy to search for spaces that are specific to your needs. All you need to do is enter your information here, and you will be given access to a database of office space listings complete with virtual tours, floor plans and all-in monthly prices. Finding the space of your dreams is only aclick away.
Reviewing each section of a commercial lease is a long process, but it’s essential to identifying ways a tenant can save money. One often overlooked area of these documents is the array of options that can be used to securitize a lease, as well as the Surrender Clause upon lease expiration. Here are a few different options a tenant should consider when negotiating their lease.
Types of Securitization
There are multiple options and opportunities when it comes to security deposits. Review your options thoroughly to decide which makes the most financial sense for your business.
- Cash Security Deposit: A landlord will hold this in an escrow account, and it is returned if the space is in good condition at the end of the lease.
- Letter of Credit: The bank holds the money while it earns interest. However, there is a fee of one-half to one percent each year.
- Checking Account: The money is held in a checking account, and it can’t dip below the amount of the deposit. This can allow tenants to keep the money in their own account, which is beneficial if the business wishes to acquire equipment, property or another large purchase, as it shows stronger financials.
- Surety Bond: This acts as an insurance policy if things go poorly, and it doesn’t impact credit. Surety bonds are available for larger companies. If the landlord draws upon the security deposit, then the insurance company will cover it.
Expensive Lease Language
Carefully read the language of the lease as it pertains to the Surrender Clause (the condition the tenant is supposed to leave their space in upon lease expiration), as different terms carry their own meanings and some can require a lot more work and money. For example, retail landlords often want the space returned in a “white box” condition. This can be quite expensive, as it means moving furniture, deep cleaning and removing wires. If the Landlord requires the premises to be left “in the condition that existed when the premises were turned over” this could include reversal of any improvements or alterations done to the space. Tenants often underestimate the cost of these requests versus the value it will have for the business. However, you can avoid these expensive requirements by negotiating the space be returned to “broom clean” condition. Working with the language of the lease to favor the tenant can save a significant amount of money and time for a business.
With every lease, there will be an opportunity to negotiate both Securitization and the Surrender of Premises. It is best to use a qualified commercial real estate broker on the Tenant’s behalf in order to achieve optimal savings and negotiate the most favorable lease terms.