The goal for most tenants is to minimize the cost of office space (get the best value and obtain the best space that still works the defined budget parameters). To achieve this goal, it helps to understand the drivers of such costs before you can manage them. Your chances for success in this effort will be improved greatly by seeking expert assistance.
If a tenant does not succeed in achieving maximum value, it is most likely related to one or more of the factors (below) not being properly addressed. Here are some key factors that impact the total cost of your office space:
• Selected location
• Negotiations and lease structure
• Square footage occupied and specific layout
Let’s review these items in greater detail.
When addressing the location, the first requirement is to undertake a thorough review of the market and adequately identify all potential locations that may match the key needs of your firm, including but not limited to the following elements:
• adequate employee work space and scalability
• Image, brand and customer experience
• employee and client access and convenience
This should always be done even if you are strongly considering a renewal in your current location.
The comprehensive market search would uncover hidden opportunities including spaces not officially marketed or available and subleases. When you have this type of insight you’re better able to create leverage and create a true competition for your business. While owners may have specific circumstances, all strive to lease space at the maximum current market conditions will bear.
The objective of course, is to negotiate favorable financial terms which should be based on current market conditions. Unlike retail shopping, in commercial real estate must be structured with an effective negotiation strategy. Today, landlords are more flexible with terms and aggressive leasing packages to not only attract tenants but retain the ones they have. However, the proper timing and approach is needed to take full advantage of market conditions and creating leverage in lease negotiations.
The potentially most challenging factor address is the actual layout of the space. Specifically, maintaining cost control over the design and construction process is critical. The efficiency of your office space and the cost associated with its build out will be a major contributor to your occupancy costs. It is understood that many companies are increasingly focusing space utilization with a goal of doing more with less. Securing the proper volume of office space through efficient design, space standards and construction management can yield significant cost savings.
Who’s got your back?
In making the best real estate decision, there are several key professionals that are dedicated helping you identify, negotiate, and design the office space that best serves your financial and operational objectives.
The first is a commercial real estate broker / tenant advisor that has expertise in the product type, market or industry. In creating a truly beneficial layout it’s good to have an architect or space planner to help provide thoughtful insight on how best to use space and still satisfy key requirements. It probably should not go without saying that you should always have legal counsel experienced in real estate to assist with understanding and negotiation of the complexities of the lease agreement.
Engaging a team of experienced professionals who work together with common focus on your best interests will insure the best possible outcome in addressing the office occupancy solution.