Take these steps before you visit a new space
You’ve outgrown your office or coworking space, and it’s time for new digs. Your first inclination may be to set up a bunch of tours and see what’s out there. You want to move on this ASAP, right?
Acting too fast could lead you to waste time and energy on seeing spaces that ultimately won’t work for your company. In commercial real estate, a little bit of pre-planning goes a long way. Knowing what you want and need before you start will ensure you land in an office that truly feels like home.
You should always try to align your real estate requirements with your current and future business objectives. At the Habits of Profitability™ Team, we constantly see higher profitability and bottom line stabilization in relation to highly organized CEOs when making a large financial decision. Remember, your office space or retail space is generally the overhead you cannot adjust when you need to and can hurt profitability down the road. The less flexible the number on your profit & loss, the more impact the decision has on your overall business.
GIVE YOURSELF LEAD TIME — LOTS OF IT
Finding an office takes longer than you might think. You should allow yourself six to 12 months to tour spaces, narrow down your options, negotiate your lease and get ready to move.
If you plan to sublease or move into an office that’s already built-out, your timeline will still be between 3-6 months. Building out a space obviously eats up more time; a full construction buildout can take between 2-6 months. If you’re eying a custom-built space, it’s best to give yourself up to a year.
This gives you enough time to thoroughly vet properties, lock in your lease, get your space ready and move your team. Many of these stages involve negotiation, a process that sometimes moves slowly. And don’t overlook the time-consuming steps that must take place once the lease is signed. This is when the real work begins. You’ll need to work with contractors, vendors and utility providers to transform this space into a place where people work.
You might be able to move apartments in a weekend, but commercial moves often burn months. Buying new furniture, getting your IT/phone system installed and hiring a moving company are just a few of the many time-consuming aspects of a commercial move.
Is it possible to get it all done in less than six months? Yes, but expect those six months to be stressful. The accelerated time frame will limit your options and require that you act swiftly and decisively every step of the process.
MAP OUT YOUR GROWTH TRAJECTORY
How do you anticipate the size of your team to change over the next few years? This matters not only for the size of your space, but also for the length of your lease.
Fast-growing companies should look pre-built office space on a short-term lease. You may outgrow a space quickly and need to move in a few years. And if you’re looking at a 2 or 3-year lease, you won’t want a space that will require a full build-out. There are circumstances where a fast-growing company could consider a longer term lease, but make sure that you have expansion options within your lease.
A more stable or mature company — meaning you expect your headcount to roughly stay the same — should look for a longer lease of 5-10 years. Since you plan to stay awhile, an office you can customize and build out to your specifications would be a better fit. Long-term tenants also get better lease terms, such as a lower rental rate, more free rent and a larger construction allowance from the landlord.
IDENTIFY YOUR TARGET NEIGHBORHOODS AND BUDGET
Now it’s time to think about location. This is top-of-mind for your team — both your current employees and future ones. Where you move could affect your retention and recruitment efforts. Where do most of your employees live? How will their commute change? Do they require parking or access to certain bus or train lines?
You may already have a few target neighborhoods in mind. This is a good time to loop in a broker who is well familiar with your city’s commercial real estate market. A broker can help you understand what’s feasible for your budget and needs. Set a minimum and maximum with your broker. Before you start looking at spaces in that up-and-coming neighborhood where Google just built a new office, you’ll know if the area is within your budget.
With a good idea of how much space you need, the length of lease and your budget, you’ve already made a ton of progress in your office space search. It might not feel like it because you haven’t seen a single space yet! But you’ve eliminated a ton of bad-fit spaces before you’ve even started. And now you’re ready for the really fun part: Touring spaces so you can find The One.
