You've decided that now is a great time to move out of your home office and into leased office space because rental rates have not been this low in years, and there are plenty of office choices available. So, what's the next thing you should do? Take a deep breath, sit down, and think about your move. We're going to give you an overview of the things you should be considering before calling your tenant-oriented real estate broker. A lease has significant legal consequences, and involves describing a tenant-landlord relationship that can go on for years. Some leases are for as long as 99 years, with renewal options.
The first step is to define your requirements. How many people are going to be working in the office space? Do you need a reception area? Will you need a conference room? How many private offices will you need, and do you need an open work area? What size should the private offices be? Should the conference room be for 4, 6, 8 etc. people? Will you need a kitchen area and eating/lounge area? How about a separate mailroom/fax/copier room? And storage space? Answering those questions will help you determine how much space you are going need? Your tenant-broker should be able to guide you in the typical rooms' sizes for your use.
The next step is to contact a real estate broker who specializes in working on behalf of tenants to give you an overview of the real estate market so you can get an idea of what your rental cost might be. Then it's time to start preparing your budget for the move. The first item, of course, is your anticipated occupancy cost. Be sure to include everything, rent, CAM, taxes, utilities, maintenance, etc. Contact your insurance agent for a quote on your new space coverage. Budget for design and tenant improvements, if needed. Furniture, IT cabling and equipment, and telecom equipment and installation should be budgeted. Here are some other items that you should consider in your budget: disposal of old furniture and equipment; printing and marketing costs resulting from move; and always include a contingency fund (“everything takes longer and costs more” is often quoted when talking about a move).
If, based on the budget, your move still looks feasible, then the next step is to determine where you want your office to be. Have you determined where your clients are located in relation to your anticipated office location? That's an issue if you want your clients visiting your office. If they are going to be visiting, make sure you check out the parking availability for you, your employees, and your guests.
Now you are ready to do an initial property review. Contact your tenant-broker to set up visits to several properties so you can begin to get a feel for the market. Make sure you take notes as you review properties because it's hard to keep track of all the spaces you might visit without good notes. Ask your tenant-broker if he or she has a standard site-analysis form. Bring along a camera as an aid to recollection. A good tenant-broker will do an initial review of space based on your requirements, and eliminate properties that he believes will not match your needs. That will save you lots of time.
Once you've focused on a particular property, it's time to have your tenant-broker prepare a Letter of Intent outlining the significant terms of a proposed lease for your review. The Letter of Intent will not be binding on you or the landlord, if prepared properly. It's a means of determining whether you're going to be able to negotiate these significant terms in order to enter into a lease including these terms in addition to the other 200 or so paragraphs and subparagraphs of the typical lease.
Once you and the landlord have agreed on the significant terms of the lease it's time for the actual lease document to be drafted for review by your legal counsel. Then the negotiations begin on all the final details of this complex and long-lasting relationship. Good luck!
The first step is to define your requirements. How many people are going to be working in the office space? Do you need a reception area? Will you need a conference room? How many private offices will you need, and do you need an open work area? What size should the private offices be? Should the conference room be for 4, 6, 8 etc. people? Will you need a kitchen area and eating/lounge area? How about a separate mailroom/fax/copier room? And storage space? Answering those questions will help you determine how much space you are going need? Your tenant-broker should be able to guide you in the typical rooms' sizes for your use.
The next step is to contact a real estate broker who specializes in working on behalf of tenants to give you an overview of the real estate market so you can get an idea of what your rental cost might be. Then it's time to start preparing your budget for the move. The first item, of course, is your anticipated occupancy cost. Be sure to include everything, rent, CAM, taxes, utilities, maintenance, etc. Contact your insurance agent for a quote on your new space coverage. Budget for design and tenant improvements, if needed. Furniture, IT cabling and equipment, and telecom equipment and installation should be budgeted. Here are some other items that you should consider in your budget: disposal of old furniture and equipment; printing and marketing costs resulting from move; and always include a contingency fund (“everything takes longer and costs more” is often quoted when talking about a move).
If, based on the budget, your move still looks feasible, then the next step is to determine where you want your office to be. Have you determined where your clients are located in relation to your anticipated office location? That's an issue if you want your clients visiting your office. If they are going to be visiting, make sure you check out the parking availability for you, your employees, and your guests.
Now you are ready to do an initial property review. Contact your tenant-broker to set up visits to several properties so you can begin to get a feel for the market. Make sure you take notes as you review properties because it's hard to keep track of all the spaces you might visit without good notes. Ask your tenant-broker if he or she has a standard site-analysis form. Bring along a camera as an aid to recollection. A good tenant-broker will do an initial review of space based on your requirements, and eliminate properties that he believes will not match your needs. That will save you lots of time.
Once you've focused on a particular property, it's time to have your tenant-broker prepare a Letter of Intent outlining the significant terms of a proposed lease for your review. The Letter of Intent will not be binding on you or the landlord, if prepared properly. It's a means of determining whether you're going to be able to negotiate these significant terms in order to enter into a lease including these terms in addition to the other 200 or so paragraphs and subparagraphs of the typical lease.
Once you and the landlord have agreed on the significant terms of the lease it's time for the actual lease document to be drafted for review by your legal counsel. Then the negotiations begin on all the final details of this complex and long-lasting relationship. Good luck!