Six things to consider when you are selecting new office space.
By Tucker Hughes
For some business owners, the thought of moving into a new space is extraordinarily exciting, and for others, it may seem like an undertaking on par with climbing Mt. Everest. For the majority of business owners, an office move will evoke a combination of both these feelings. Make no mistake, there are plenty of things your broker will need to be thinking about during this process, but fortunately, the list of things that you must consider before you get started is relatively short. Here is a look at the six very important considerations to make when you’re selecting new office space.
Selecting New Office Space
1. How Will My New Space Improve My Company Culture?
You may be surprised that this first consideration has nothing to do with cost. That’s because studies have conclusively proven that the happier your employees are, the more productive your business will become. This is a big consideration when selecting new office space.
What if spending a few extra bucks per square foot could increase your productivity by 2 percent? Or, what if springing for a nicer office would enable you to attract the top talent in your industry? Isn’t the cost per square foot less important than cultivating a sustainable culture of high productivity?
To illustrate, consider that you are trying to woo a stellar job candidate who is also being recruited by a competing company. Your company has offered a salary of $105K. You have an office in the suburbs, where employees each have a cubicle. In contrast, your competition is located in an urban setting near restaurants, shopping, and transportation. Their office is far livelier, and exponentially more convenient for young professionals who prefer to live downtown. They offer that same recruit $100K. The overwhelming majority of the time, that recruit will accept your competition’s offer. To avoid this scenario, prioritize the impact that your space will have on your team, rather than splitting hairs over a few dollars. Consider how selecting new office space will impact your workplace culture.
2. Is My Broker Acting as a Dual Representative?
Unfortunately, in far too many transactions, brokers act as dual representatives. That means they may be working on your behalf as a future tenant, while simultaneously working for your future landlord. It is absolutely impossible for a broker to represent your best interests while, at the same time, trying to get the best deal possible for the property owner. Imagine for example, that you’re being sued. You certainly wouldn’t want your defense attorney to also be the prosecuting attorney.
It is unfortunate that, to date, there are no laws that require brokers to disclose if they are working as dual representatives. To ensure that you do not wind up with a broker who has a huge conflict of interest when you are selecting new office space, seek out a brokerage that exclusively represents tenants and not landlords.
3. Where Do I Want My Company to be in 5 Years? 10 years?
Before you move your company, you’ll want to consider the future growth of your business. This is crucial in determining an appropriate location for your business as you embark on selecting new office space. For example, if you have plans to increase your work force substantially, you’ll want to make sure that you don’t move your business to a location where you risk exhausting the qualified work force. Likewise, you’ll want to consider commute times for employees. Just because you have a home in the suburbs, doesn’t mean that moving your office there makes sense (particularly if your employees all live in the city). It’s worth repeating that a happy team of employees is a productive team, and making their lives easier with shorter commutes will go a long way.
4. Have I Seen Other Office Spaces that have the Design/Décor/Culture that I Want?
Chances are, you’ve walked into an office at some point and thought “Wow! I wish my office was like this.” Try to remember those spaces when you start envisioning your new office, as it will help you weed out the spaces that won’t work. Moreover, if there are “must-haves” that your new office will require, you’ll want to ask potential landlords how much they are willing to pay for improvements. Having a clear vision in mind as you begin the journey of selecting new office space will be helpful in eliminating potential spaces that will prohibit you (structurally or financially) from creating the office you crave.
5. What Kind of Reputation Does the Landlord Have?
When it comes time to start the search for selecting new office space, knowing the reputation of a particular property owner (for smaller buildings) or the property management company (for larger buildings) may save you a great deal of grief in the future. In general, larger, institutional buildings have sophisticated property management teams in place. They generally work with the best engineers and architects, and pride themselves on tenant satisfaction.
Likewise, many owners of single properties have excellent reputations. Others, however, do not. It is wise to ask around, and ask other business owners about the level of service they receive in their building. Are repairs made quickly, or is the air conditioning on the fritz for weeks at a time? Are they able to make improvements on their own if they can’t reach their landlord? Knowing these answers in advance could save you from lost days of productivity in the future.
6. Who Will Be My Neighbors?
When beginning your search for selecting new office space, pay attention to the other tenants in the building. You wouldn’t want your office to be right next door to your competition, would you? Or, perhaps you want to look for space in a building where a complementary business is already housed. For example, a real estate agency may want to be in the same building as a mortgage lender or title company. Finally, there may be other businesses that you just don’t feel comfortable being neighbors with, and it’s certainly better to find that out ahead of time before you sign a lease.
This list on selecting new office space is by no means comprehensive — there are dozens of things to think about when choosing a new office space. However, these six considerations are important enough that you simply cannot afford to overlook them.
Remember that your decision to move to a new office should support a comprehensive real estate strategy designed to enhance your company culture, increase productivity, and ensure your business will be sustainable for years to come. If you’re considering a space that doesn’t do that, keep looking.
About the Author
Tucker Hughes is director of Hughes Marino, a Southern California based commercial real estate company with brokers exclusively specializing in tenant representation for lease negotiations and building purchases. For more information call (949) 916-2111, email: firstname.lastname@example.org, or visit www.hughesmarino.com