Here’s When You Should Walk Away From a Deal


Here's When You Should Walk Away From a Deal-min

Negotiating a deal for an office space, home or retail space is a delicate art that takes thoughtfulness, precision and a clear idea of what you want. Walking away from a deal is not only the best leverage to get everything on your list of asks, but can also be necessary if the deal is headed in a direction that’s not in your best interest. Here’s how you can determine when it’s time to walk away.

When You Lose Focus of Your Original Goal

When looking for a new office space, it’s not uncommon to get caught up in a particular space or location and get lost in the idea of it. For instance, perhaps you’re on the hunt for a new office space in an attempt to shorten the commute for your employees. In the process, you happen upon an office space you love at a reasonable price, but it’s nowhere near where most of your employee base is located. If the original goal was to alleviate the commute for your team, and you end up looking at a potential office space that isn’t in alignment with that, no matter how nice it is or how many amenities it may boast, it’s best to take a step back and reevaluate why you decided to search for a new space in the first place. This is also the type of thing that can happen when you are looking to save money by reducing your square footage, but then start looking at nicer and higher class properties than you were in before. If the per square foot price becomes higher than you were paying before, you may end up taking a smaller space without any real cost savings.

When the Risk Far Exceeds the Potential Gain

Searching for the perfect location can be exhausting, especially when you have a large list of necessities. After a few less than impressive viewings you might be tempted to start to lower your standards. If you find yourself in a position where there are a laundry list of maintenance issues or you’re not 100% comfortable with the lease term the landlord is insisting on, it’s better to err on the side of caution rather than taking a risk that may negatively impact you in the end.

When It’s No Longer a Win-Win Scenario

If a potential landlord is using your interest in the property as a bargaining chip in their favor, rethinking the deal and even walking away from it could be in your best interest. For example, if the person on the other side of the negotiation gets emotional, is making threats, or is lying to you, this should tell you that you do not want to get further involved with these people even if the property you found hits all of your wants and needs. Remember, this will potentially be your landlord for years to come. In this situation it’s also beneficial to work with an experienced broker to ensure that you aren’t being taken advantage of in the negotiation process or setting yourself up for a frustrating leasing situation.

At the end of the negotiation process, you should feel good about the deal you signed, and by utilizing your ability to walk away, you can ensure that your lease and space are both tailored to your exact needs.

How Much Space Do You Need to Grow?


With success comes growth and with growth comes a need for more employees and space for those employees to work. While it can be challenging to know just how fast your company may grow, an estimate is necessary for you to understand your needs and for you to have an adequate amount of space to accommodate that growth. Check out these tips to find that sweet spot of room for expansion while also being realistic about what are those needs.

How to Determine Space Requirements for Growth

Every business has different needs when it comes to space, so there isn’t a magic formula to guide you to an exact number of square footage, but you can make an educated estimate. Each employee you have on staff will require approximately 220 square feet in office spaces that aren’t open concept. So for example, if you have 100 employees on your team, you would need to account for 22,000 square feet in work space to accommodate them. From there, you will also have to take into consideration other spaces such as conference rooms, lunch areas, restrooms, storage and any other additional rooms you need for your specific office layout. After you have an idea of how much space you need to accommodate your current workforce, multiply the total square footage by 10 to 20 percent depending on how much growth your business projects. This additional space for growth is known as shadow space.

Shadow Space vs. Right of First Refusal

There are a few different ways you can go about ensuring you have adequate space to grow. As we mentioned above, you could rely on shadow space. This space is an unused buffer that will be filled as you add more employees to your team. But what happens to the space in the meantime? More often than not, businesses are paying for the space even when it’s not being utilized. This option is great for short-term growth, but if your plans to expand don’t move as quickly as you hoped, you could be paying for more space than you need.

On the other hand, you can work with your broker to include a right of first refusal agreement in your lease. Here’s what that means. Say you come across an office space that fits your current space needs, and there is also an additional adjacent space that would be perfect for you to grow into when the time comes. A right of first refusal agreement ensures that before your landlord leases that space to a third party, they must offer the space to you first. This option is great for companies that plan on growing, but need a little more time to achieve their goals.

An important step in ensuring your new office location has the perfect amount of space is to analyze how your business has grown in the past and how you predict it will continue to grow in the future. From there you can formulate a realistic idea of how much additional space you may need, and decide if either shadow space or a right of first refusal agreement are viable options for you.

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 a click away.

The Importance of Infrastructure


Paying attention to infrastructure means paying attention to the nitty gritty details, but it’s these details that save you time and money in the long run. Below we have your guide to all things infrastructure for your new office space.

Movable Partitions and Furniture

As your business changes size and scope, having appropriate accommodations will make this transition seamless. Movable partitions and furniture are an easy and cost-effective way to accomodate for the expansion of your business. Seeking infrastructure that lends itself to the incorporation of movable additions is an imperative way to adequately plan for your company’s future.

Internet Connectivity

We all run on wifi these days, and your new building should be able to support that need for the entire office. Infrastructure plays a huge role in how easy or challenging it may be to set up your necessary systems. The difference between fast and effective wifi and internet that drags can be in the way your space is designed. Before you commit to a space, have the landlord run a network test on existing channels to ensure they work properly. If any of the cablings needs to be restructured, it could turn into a more costly project.

Security Systems

Ensuring the safety of your employees and important information is crucial. Consider if the space you’re looking at has a doorman or if there’s already a security system. If the security system needs to be updated or if one needs to be installed, this could turn into a costly and expensive project. Be on the lookout for existing security and how that aligns with what you need to ensure the safety of your employees and company assets.

Utilities

It’s easy to overlook things like sprinkler systems or outlets. If the sprinkler systems don’t function properly, you’re putting your employees at risk and either you or your landlord will be required to replace them. As for electricity, it’s recommended that you ask your landlord to run an electricity survey to gauge how much electricity your office space is using. Understanding the efficiency of your electricity and utilities can save you time and the surprise of higher-than-expected utility bills.

The inside of your new location is just as important if not more than the actual physical location. Weigh the pros and cons of location and infrastructure to narrow down the types of office locations you’re considering.

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.

Choosing the Best Location for Your Office


Selecting the perfect location for your office is no easy task. It is vital to consider factors that will satisfy clients as well as employees. Keep in mind these important elements when searching for your new office location.

Accessibility

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.

Proximity

Think about what sorts of amenities you’d like in the surrounding area. Are there restaurants nearby for client meetings or are you close to any green space your employees can utilize to unwind and stay active? While the inside of your space is incredibly important, the area you’re located in provides an important first impression of your business.

Proper Spacing

If you have multiple offices, it’s imperative to understand what the commute between the two spaces will be like. Just as it’s important to have accessible transportation from your home to your office, it’s also important to secure a location that ensures an accessible commute amongst your various office locations.  

Strategic Partners

Take note of potential partners in your desired location. Situating your new office within a hub relevant to your industry can make all the difference in the ease of your partnerships and business deals. You are who you surround yourself with, so make sure you’re seeking spaces that work hard for your company.

Cultural Fit

Community culture means a variety of things depending on the area in which you’re looking. It’s essential to understand what role your business will play in the local culture. Does this culture align with your company’s values? What role would your company play in this community? Assimilation into your area is a necessity for success in your new location.

While there are many things to consider when choosing a location for your office, it all boils down to figuring out what your company needs to succeed and choosing a location that fits those ideals.

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.

5 Things to Consider When Searching For A New Office


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.

Location

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.

Cost

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).

Physical Space

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.

Infrastructure

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.

Employee Needs  

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.

West Loop Fuels LaSalle Street Renaissance


As rental rates continue to rise for commercial space in the near west side, companies moving to LaSalle Street and the Loop are reaping the benefits. The Loop has been experiencing a strong push in building upgrades, amenities and renovations thanks to the success of River North and River West. The end result is a healthy inventory of updated vacant space with tremendous amenities in traditionally high-demand neighborhoods. Here are a few things to consider when selecting your next office:

Supply & Demand

Areas like LaSalle Street and the Central Loop, which historically have been seen as high-demand and high-priced, are actually offering more for the money than neighborhoods like River West, Fulton Market and West Town.

Proximity vs. Practicality

While the allure of being close to Google and McDonalds is enough for people to pay higher rents for lower quality and little to no amenities, savvy business owners are taking advantage of lower rental rates and getting centrally located spaces in great buildings.

Location Fundamentals

Real estate will always be about location. When finding the right office, consider where it’s located in proximity to employees, current clients, potential clients and vendors. Remember that if the space is out of the way, it will make it difficult for prospective clients to find the business.

How to Best Time Your Office Occupancy


When moving to a new office space, there is quite a bit to consider to ensure the process goes smoothly. One area that often gets overlooked is transition timing and lease overlap. However, this is a key point to be aware of, as a disruption or delay in the build out process can mean operating without an office space for an unknown period of time.

Before the office packing begins, verify the new space will be ready when you need it. Check in with the landlord regularly to ensure the process is moving forward at the agreed upon pace. Internal processes – especially if there is construction involved – can take longer than originally anticipated, which is why an established and realistic timeline is crucial.

It is not unreasonable to establish consequences should the space not be delivered when promised. This will need to be written into the initial Letter of Intent and confirmed to be in the lease prior to signing. If key milestones in the buildout process are not met, then the incoming tenant should receive free rent, a push back on the commencement date, compensatory damages or other lease concessions.

In addition to including consequences in the contract, the tenant should reach out to their current landlord to prepare for the worst case scenario. Create a contract with the current landlord for a month-to-month lease just in case the new space is not ready in time. This allows for peace of mind with the business, as you won’t be left without a space in which to operate.

Landlords traditionally prefer to use their own recommended vendors when it comes to space renovations or construction. While they may prefer to work with contractors they know and trust, too often the reason they restrict outside work is because they receive a portion of the costs. However, this makes the landlord more accountable, which makes contract negotiations even more important. A licensed broker will know how to verify the landlord’s quotes and ask for their itemized breakdown of the associated costs. Additionally, good brokers will have their own set of preferred vendors who can review the quote to ensure it is accurate.

As a general rule, avoid moving spaces more than one month in advance, as it often makes no financial sense to leave the currently leased space to move into the new one early. Despite the free rent of moving in early, the old space is still accruing rental costs. Ideally, move into the new space around one month in advance to allow for a seamless transition.

How to Plan Your Company’s Move


Relocating an entire office is a daunting task, and business owners rarely have the time to allocate to the process. Thankfully, there are professionals available to guide businesses through the transition, effectively reducing stress and increasing the efficiency of the move. The secret is planning and knowing what to expect, which will greatly increase the chances of a smooth transition.

When considering a relocation, a long lead-up time is imperative. Moving an entire business is a large, involved process with many moving parts that can really disrupt productivity if not planned property. A general timeline to consider is: a company that requires a 10,000-square-foot space should begin their planning 12 to 18 months prior to moving; a 4,000- to 7,000-square-foot space should start nine to 12 months in advance; and a space less than 4,000 square feet should plan at least six months before the move. The longer the lead up time, the less likely there will be major complications, effectively saving the company more money.

Once a business has a timeline established, it’s time to set and manage expectations. Too often this step is overlooked, and yet it is essential in creating a smooth, efficient relocation. While this responsibility largely falls on the broker, the client will need to accept what is possible within their current situation and budget. For example, if a client wants a custom buildout, budgets will need to increase or compromises will have to be made. Unfortunately, there are brokerage firms that will over-promise a client simply to obtain their business, thereby setting unrealistic expectations. This is a dangerous precedent to set, as the client will be left with an unpleasant experience due to a drawn out process, less-than-ideal prices and a higher cost. The best business practice to benefit every party is to establish realistic expectations, then work to exceed them.

Prior to setting foot in a single office space, it’s a good idea to develop a basic layout and checklist of requirements for the new location. Identifying and prioritizing employee activities and needs will help provide the broker with a clear idea of the end goal. Decide how many offices and conference rooms are needed, and how much space should be allocated to each employee. A helpful tip for this process is to think about the day-to-day lives of each employee, as this will provide clues as to what amenities the office layout will need.

Remember that planning the layout of a space isn’t only about the current workforce and day-to-day needs. It’s about creating a template for the business to grow. Consider how large the next office must be, and then identify how much space should be allocated to each department of the workforce (sales, marketing, creative, programmers, accountants, etc.). How many private offices, conference rooms, collaborative spaces and kitchens will the office need, and how much square footage should be allocated to each employee? The process that addresses space requirements is called “benchmarking.” For example, a tech company will have different requirements than a law firm when it comes to design, layout and square footage allocation. A creative agency with 10 employees may want 175 to 190 square feet per person, whereas an accounting firm might want 230 to 250 square feet per person. Effective benchmarking through a discussion with the broker will improve their ability to find the right space that can be perfectly utilized per a business’ needs.

Once the preliminary search has narrowed down a few options of spaces that would be right for a business, this is the perfect time to seek the input of a space planner or architect to discuss the buildout and design plans. Being able to compare space plans among a selection of top contenders will help discern if the exact square footage and shape of each office will be a strong fit. It may depend on the building, but this preliminary planning can typically be done alongside the lease term negotiations. As always, be sure to take advantage of a long lead-up time as well as the resources of a commercial real estate broker in order to acquire that dream office in a smooth manner and at a fair rate.

Here’s Why Major Corporations are Moving Downtown


Corporate giants ditching their suburban campuses for Chicago skyscrapers has been a common occurrence in the last few years — Kraft Heinz, ConAgra, McDonald’s, Google and Motorola. Now Wilson Sporting Goods joins the movement, leaving its location near O’Hare Airport for the iconic Prudential building.

Chicago isn’t the only market experiencing this massive shift in commercial real estate. The New York Times recently reported the same situations in metropolitan areas around the country. Just what is causing these corporations to leave their sprawling headquarters for fast-paced urban areas?

Tech-Savvy Talent
Countless reports have indicated that millennial workers are attracted to living and working in high-energy urban areas. These tech-savvy employees may not even have a car, so driving an hour to the office isn’t an option. International corporations looking to attract the next generation need to be easily accessible via public transportation, which rules out most suburbs.

Better Amenities
Trendy lunchtime spots and snacks from local food trucks are just a few of the many amenities offered simply by working in Chicago. These urban incentives are exactly what top talent are looking for when selecting their next position. Additionally, clients and customers who visit their corporate partners prefer to spend time downtown.

Top Vendors
The booming South Loop and West Loop neighborhoods are filled with smaller companies built to serve the needs of the ConAgras and McDonald’s of the world. Corporations that don’t want to miss out on the next big mobile ordering app or company culture trends need to be where these ideas are born.

Click here to read more about how the South Loop is the neighborhood to watch for commercial real estate.

Moving Your Office? You Need a Plan.


Relocating your company to a new office space is an exciting time, full of endless possibilities. Such a large undertaking will of course create stress, but proper planning in advance will save you and your business time, money and hassle.

Tenant Advisory Group has helped hundreds of companies grow their business in a new space. See below for key tips we provide our valued clients.

Build Your Team
A company relocation has too many moving parts for one person to handle. It’s important to have a solid team in place to keep track of every detail. Here are a few of your key players:

  • Involve your moving company in the planning process as early as possible to get the best estimate on your relocation timeline. Contact your furniture vendor and/or partner with an interior designer to plan the look and layout of your new space.
  • Have an in-house or on-hand technical expert who can spearhead setting up and migrating your phone and data systems.
  • Designate at least one employee as the Move Captain. This person will communicate clearly with staff regarding packing procedures, as well as what to expect in the new location.

Take or Toss
Starting fresh in a new office presents the opportunity to shed items you may not have use for anymore.

  • Before making any decisions, prepare a complete inventory of everything in your office — from the conference tables to paperclips.
  • Comb through sensitive items such as bank statements, contracts, invoices, client information, etc. Either pack items in secure filing boxes or arrange for a shredding service to take them away.
  • Get rid of unwanted electronics, computer equipment and furniture by either recycling or donation. Make sure to gather the necessary paperwork for potential tax write-offs.

Spread the Word
Let your entire network (clients, vendors, professional organizations, etc.) know that your company has a new space and address.

  • Make a list of your current clients and vendors, and notify everyone of your change of address to avoid any hiccups in business or productivity.
  • Prepare and order new stationery, business cards and envelopes to reflect your new location.
  • Contact the post office to have all mail forwarded to your new address.

For questions about how Tenant Advisory Group can make your Chicago relocation as seamless as possible, contact us today.

1 2