Guide To Selecting an Office Area And Building To Lease
To find new office space for your business, whether to relocate or establish a new location, you should first assess your needs and create a budget. After completing these more complex but essential tasks, you can now move on to the fun part of selecting a property and location.
The process of finding the right location and property to house your office can be just like looking for a home. It can be overwhelming, exciting, and sometimes exhausting all at once. Therefore, it is essential to list the critical criteria you are looking for in terms of location and property. This will allow you to think logically and avoid getting overwhelmed by the stunning view or high-tech gym, regardless of other requirements.
Guidelines for Choosing the Right Office Location
Each business decides how to locate its office differently. This caveat aside, office users should consider the following criteria when considering potential office locations:
How to commute
Customer location.
Transport accessibility.
Security and safety.
Neighborhood ambiance and amenities
Before we get into the details of each topic, it is essential to note that this article focuses on criteria that must be considered when choosing a neighborhood or general area within a city or municipality. Future articles will discuss multi-state and city searches.
Commuting Patterns
To understand where employees commute from, companies should first perform a zip code analysis on their employees' homes. Tenants often start searching for an office by having a very rigid idea about the area they would like to work in.
One example is that a company may believe that Midtown Manhattan is the best location for commuting, but data could show that it works equally well downtown. This analysis can be done using geographic information systems (GIS). This software should be available to all brokerage professionals. Tenants can also purchase their own. There are even free options.
A broker is essential for larger companies. They are responsible for ensuring that you evaluate the correct universe of employees because not all employees will be equal. For example, some companies will only need to know where the top decision-makers are located.
Customer Location
You will need to consider where your employees are located. This is especially important for customer-facing businesses, such as dental or medical tenants. However, it will also impact professional service tenants such as accounting, financial services, or legal firms. It would help if you also looked at this element in reverse. Perhaps your company does not host clients often, but your employees visit customers frequently. Analyzing customer zip codes can help you determine the best locations for your business, both from a client's perspective and your employee's.
Access To Transportation
Companies in urban areas will prioritize mass transit. This includes bus, rail, and subway lines, regardless of their customers and employees' locations. Suburban office tenants need to be near major highways and take into account local traffic patterns. Access to an airport is a must for companies that have employees who travel frequently or receive visitors.
Safety And Security
Every business owner must be concerned about the safety and security of their employees and office. Therefore, it is essential to review crime statistics in any area or city you are considering. While the FBI provides extensive crime statistics for Metropolitan Statistical Areas (MSAs), many other resources provide detailed information about crime rates in particular neighborhoods.
Neighborhood Ambiance
When choosing a neighborhood, local amenities are a vital factor for many companies. In addition, it is essential for companies who care about their employees to put together food services that appeal to everyday workers.
Other than food and other related services, such as coffee purveyors (perhaps the most essential workplace tool) and bars for after-hours client meetings and team building, fitness facilities, doctor's offices, pharmacies, grocery and convenience stores are key amenities tenants should be looking for in a potential neighborhood. It is easy to assess the location of these conveniences by evaluating a property's Walk Score.
Although it is less tangible than the neighborhood atmosphere, it is still important. What kind of atmosphere does the neighborhood exude? How does this affect the tenant's sensibilities? Different companies will look for different environments. For example, a technology startup might prefer a newly gentrified and grittier area, while a financial service firm would prefer a more established, well-developed location. Finding a place where your company's values and culture are reflected is key. This will ensure that both clients and employees feel at home.
Guidelines for Choosing the Perfect Property for Your Office
Once you've narrowed down your options for location, you can start looking at potential properties for your office. While companies may sometimes assess multiple properties simultaneously, it is important to note that for most office tenants, the transition from choosing a neighborhood to selecting a property will be much easier.
Six main criteria are important for prospective tenants when choosing a property to rent.
Costs.
Floor plate efficiency.
Wellness, Amenities, and Building Image/Branding
Flexibility.
Infrastructure.
Management and ownership
Prices
While it is obvious that cost is an important factor in any property you are considering, the question of how to do this is less clear. We do not recommend that tenants simply look at the cost per square foot.
Different things can be said in different languages and with different analytics. It is not important to know the cost per square foot. What is the total cost of my project, and what functionality can I expect?
To accurately estimate your total costs, it is important to determine if the rent is being charged on a triple or full-service net (NNN) or some other variation, such as an electricity net. The tenant must pay for all utility and maintenance costs (including electricity and janitorial) that are metered or occupant-specific in an NNN property. Fixed operating expenses, which account for the tenant's common areas maintenance, taxes, and insurance, are also refunded to the landlord. These costs are covered in the rental rate for FSG properties.
It is also important to determine the estimated cost of the buildout and how much of it will be covered by the landlord's tenant improvement (TI). Is the landlord also offering rent for free? If so, is the TI allowance possible to be converted into free rent, assuming that your buildout costs and other expenses are low? Is the opposite also true?
Tenants should also be aware of other hidden costs. You will want to determine what type of HVAC system is used and how that impacts electricity costs. This includes after-hours charges. Tenants should evaluate any proposed increases or escalations in operating expenses per year and how they will handle new expense categories that occur mid-lease.
Floor Plate Efficiency
The efficiency of the property's floorplates is another factor that can impact your overall cost. This refers to how easily your layout can be accommodated within a building. It all depends on where columns are placed, windows line, elevators, lobby locations, and so forth. You may need to rent more space if the property's floor plates are not efficient relative to your layout.
You will need to test-fit any property under consideration to assess your floor plates' efficiency. This will determine how your office layout fits into the property's floor plan. This service is available if you have an architect or workplace strategist. Smaller tenants will usually pay one test to their architect.
Health, Wellness, and Building Image/Branding
Wellbeing
Well-being has become an increasingly important aspect for nearly all tenants. Access to natural light and views is a key factor in determining your wellbeing. Light and views are often expensive, so tenants should evaluate the relative importance of these benefits for their business and employees.
Another important consideration for wellness is outdoor space. HEPA air filters, antimicrobial building materials, touchless entry points, and larger elevators are all items tenants are now prioritizing.
Amenities
You will also want to consider the amenities at the property, such as banking, food services, and fitness facilities. If you live in suburban areas, it is more important to have amenities within the building than if you are within walking distance from a wide range of restaurants. Business owners can still see the benefits of amenities within their property, even in urban areas. Employers often see it as both an employee-friendly amenity and a time saver. This could increase productivity.
Suburban office users should also assess the parking facilities of the building for tenants and visitors. This includes issues like access, security, and a number of spaces.
Building Image/Branding
Tenants will want to pay attention to the building's appearance and how it aligns in relation to their culture, branding, and values. Is the lobby a good representation of your organization? What is the right tenant mix for your company? Is it possible to create synergies with other businesses? Your business's property is a key aspect of your brand. It should be looked at from this perspective as well as the potential impact on employee retention and recruitment.
Signage opportunities will be a tangential concern. It serves two purposes, regardless of whether you value it or not. It serves two purposes. Sometimes, it's for wayfinding. Other times, it's for the image. The importance of the big sign depends more on the business' philosophy than anything else. There is one truth that everyone will know about signage: No direct competitor has better signage.
Flexibility
Commercial office leases usually last for long periods -- typically three to fifteen years. Many things can happen to your business during this time. Therefore, flexibility is essential when looking at potential properties. It is important to know that your lease can be extended, contracted, or terminated.
Infrastructure
The HVAC systems and elevators are two of the most important infrastructure aspects to be considered when looking at a property. First, you will need to determine how old and frequently they are maintained and whether any plans are in place to replace them. This could have a negative impact on your occupancy experience. In addition, many tenants want to know if their HVAC systems will be equipped with thermostatic control. This means that they can adjust the temperature within their area.
Tenants will want to be able to comprehend the property's technology infrastructure. Before negotiating a term sheet, it is beneficial to have experts assess this aspect. He said that it is important to know your power needs and how power is delivered to your space and the building. This is also true for internet and telephone service. The key factors are the location and identities of service providers. Depending on the company's needs, they may want to assess the building's backup and redundant power systems.
Management Ownership
When evaluating potential properties, the last thing you should consider is the reputation of the owner and management company.
Some owners do a better job managing a building than others. An experienced tenant representative will be able to help you determine which building managers and owners are most likely to give the best experience.
It is important to understand the history of the property owner. Some properties are held by families who intend to keep them in the family's portfolio for future generations. Others will be owned by institutions that may sell the property within three to seven- years of its acquisition. Because different owners have different reasons for owning real estate, it is important to understand their motivations. This will help you to negotiate and create win-win situations.
The process boils down to two factors: "Where can I work?" and "How much is it going to cost?" These two elements are always important.
