Location. Location. Location. Many people say this is the most important thing when selecting an office space for your business. But there are other factors to consider when looking at commercial real estate.
For one thing, your lease may vary. “Office leases can be 1-2 years or up to 10 to 15 years. It depends on the tenants specific needs. If you are planning on expanding in the near future, a long-term lease may not be for you,” explains real estate expert Victoria Gousse, who blogs about real estate, investment, and travel at Victoriagousse .com. “However, with longer leases the tenant can negotiate better rental rates, lease escalations and tenant improvement allocations (this is when the landlord contributes a portion of the cost to renovate your office space during a given time in your lease).”
If this is your first office lease, you may be shocked to realize some of the requirements. “Landlords will generally pass on expenses to the tenant, from insurance, taxes to all common area maintenance. Make sure you are aware of all of these extras,” notes Gousse. “Also, you will not regret hiring the services or a real estate attorney to review your lease and all its clauses?this is particularly important if this is your first commercial lease?you can negotiate clauses for breaking the lease, relocating or expanding your space.”
Here are some top tips for shopping for commercial real estate:
1) Accessibility. “Your location should be accessible to employees and clients. Keep in mind proximity to public transportation as well as nearby amenities such as dining, shopping and proximity to local vendors if this is important for your business,” Gousse points out.
2) Research location, price, etc. “You must know what the average rent per square foot is in your targeted area, as well as the vacancy rates. Institutions such as Jones Lang Lasalle & CB Richard Ellis offer periodic market trend reports on most metropolitan areas in the U.S.?this will help you make the most informed decision and aid in your lease negotiation efforts,” says Gousse.
3) Size matters: “Understand your space requirements. How much usable square feet is required per person? You can make this assessment by contracting the services of an architect or professional space planner,” advises Gousse. “This is crucial to your search: this is the first thing the broker will want to know. And making the correct assessment will save you tens of thousands of dollars in the coming years so you won?t end up paying for space you don?t need.
