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Expand your Office Space Without Leasing More Space

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This is a blog post from one of our Local OfficeFinder Memebers in the Dallas Office Market.

"Nearly everyone enjoys the success of an expanding business. More work, clients and employees allow your business to not only become more successful, but also make a greater impact on your field.

But rent is expensive. It's usually the 2nd-highest expense for most companies. Wouldn't it be great is you could grow your business without taking on the financial burden of expanding office space?

Well there are several simple and cost-effective alternatives to expanding which can be implemented within the perimeters of your existing office.

Rearrange. It seems simple enough, but you’d be surprised how much more efficient you can arrange your office. Your office layout may not be set in stone, so explore a redesign of the layout of your space - remove walls, move or replace the furniture to promote density where extra space is underutilized or unnecessary. Rearrange the layout of cubicles. Cubicles are designed with flexibility in mind, so use them to your advantage rather than arbitrarily partitioning your employees. 

Open. Collaborative spaces not only take up less square feet, but they can also promote a more creative and efficient workplace. This is especially true of younger workers who don't want to be isolated in private offices. The social aspect of an open plan where they can talk to each other throughout the day can make a big difference in their happiness in the office. My son recently passed on an offer from another company which included a very large salary increase primarily because the office environment of the new company was very quiet, staid and basically boring. Not everyone will feel this way, of course, but with a generation of workers who have spent a considerable amount of time socializing, studying and working in Starbucks, the buzz of an open environment is preferred. 

ClusterSalespeople are often not in the office much. Instead of dedicating offices or desks in an open layout to each individual person waiting for the occasional visit, condense them into a shared work area. A few shared desks for use as-needed by your on-the-go sales team can save a lot of space and not take away any of the resources. With a shared workspace in place, you can cycle employees between working at home and working in the office. This adds a new dimension of flexibility while allowing for less or reallocated office space. Dynamic office situations such as these can break up monotonous ruts and give a new energy to an office and your employees.

You don't always need more space to expand your business. Sometimes all you need is a new plan.These suggestions may not work for every business and that's okay. It may only take an architect or furniture expert to review your situation to provide solutions other than just taking on more office space. Better to pay an architect, contractor and/or furniture dealer once than to pay the landlord every month for years."

Source

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By: James Osgood

Dallas Office Space , Office Rental , Office Space , Office Space Design

Office Space Leasing Is Not A “Do It Yourself” Project

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People often think office space leasing is not much different than renting a condo, apartment or house. Having leased residences in the past, the business owner may think that doing it alone is the way to go. This can be a huge mistake!

You are an expert on your business, but you don’t often deal with leasing office space. Probably no more often than every three to five years has your business grown to the point you have rented larger office space or have decided to go for a better location. Landlords are experts on leasing office space because they do it all the time. You need an expert in office space leasing on your side, too. Choose a well-qualified tenant representative to allow you an even playing field with negotiations.

Do not think that involving an office tenant representative in the office space leasing process will cost money and result in paying more rent. This is a complete misconception. In fact, the cost of services of a qualified tenant representative is normally included in the asking price whether you choose to use the services or not.

When negotiating an office space lease, an office space tenant rep will save you money and make certain you don’t make any costly mistakes. The confusing verbiage of the lease can easily be explained by the tenant rep of your choice. After all, the landlord most likely has a commercial broker listing agent to represent him or her. The landlord’s agent will try to ensure the landlord gets the best price for the property possible. Why shouldn’t you have a qualified tenant rep by your side as you enter into negotiations for an office space?

Even if you already occupy a great office space, when it comes time to renew the lease, your tenant rep can help you get the best renewal lease possible. If you are considering vacating you current office and moving into another location, a good tenant rep will help you locate the perfect space and help you negotiate the new lease.

Entering into negotiations with a tenant rep will save you money in several ways. The office space leasing process is quite complex and often confusing. The decisions you make will impact the price you pay each month for the space in which your business resides, resulting in an impact on your profits. The numbers and line items in the lease can be translated by the tenant rep into simple language you can understand, allowing you to make sound decisions during negotiations.

The knowledge and experience of the tenant rep allows him or her to have a grasp of current asking prices and lease incentives. With the guidance of an expert tenant rep, you have the subtle leverage you need when negotiating the lease and any changes you find necessary such as tenant improvements. Also, the tenant rep will make sure you have the documentation you need to protect yourself and your business during the duration of your lease.

Going it alone in the office space leasing process simply doesn’t make sense when there are qualified tenant representatives available to help you and it won't cost you to obtain their services. There are a few questions you need to ask when choosing the right tenant rep for your needs:. These include:

  •    Can you commit the time necessary to work with me on negotiating the lease?
  •    Do you primarily ask as a tenant advocate as opposed to a real estate listing agent?
  •   Are there any potential conflicts of interest if we work together on this negotiation process?
  •   What experience do you have in negotiating leases such as the one I am considering?
  •   During the last 3 years, how many tenant representation transactions have you handled?
  •   What is your philosophy on office space lease negotiations?
  •   Do you enter into an Exclusive Representation Agreement when working with a tenant?
  •   How will you be paid? What commission do you expect to earn?
  •    What if I am not happy with your services?

If you want to lease the perfect office space and pay as little rent as possible while enjoying the maximum benefits and incentives, do not attempt to negotiate without a tenant rep’s involvement. The tenant rep’s job is to ensure your interests are protected and get you the best possible deal. It just makes good sense to have a local commercial broker who has an excellent reputation for helping get tenants the best possible lease benefits to assist you with the office space leasing process. Commercial property leases are simply not “Do It Yourself” projects; Office Finder services are readily available to provide the expert experience you need

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Top 3 biggest mistakes office tenants make (on SlideShare.net)

Lease Negotiations , Office Leasing Tips , Office Rental , Office Space Negotiations , Tenant Representation

Important Questions to Ask before You Lease Office Space

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Choosing to lease office space for lease is a big decision. The entire process can be quite confusing and it is easy to get a less-than-perfect office space deal if you don’t know what questions to ask and what certain terms mean to your bottom line.

What does $XX.XX/SF mean when stated in a lease or advertisement for office space? The cost stated usually refers to the yearly lease cost per square foot. An example would be 1,000SF of office space quoted at $10.00/SF would mean a rate of $10,000 per year or $833.33 per month. Although, in some markets it is based ont eh monthly cost. Make sure you know!

What does Rentable Square Feet mean to me? The term rentable square feet refers to the total square feet of office space used to calculate the rental rate. It may include an apportionment for the lobby, halls, and other common areas in the building that are available to you to use along with all the other building tenants.

What does Useable Square Feet mean? This is the total square footage inside the walls of the specific office space you are considering leasing; the acutula square footage you get to use. It refers to that area that is for the sole use of the tenant and does not include any sort of common area. Basically, this is the amount of office space, expressed in square feet, that you will be leasing as private office space in which you can conduct your business.

I was presented a lease that has the term “CAM charges” in it. What does this mean? The acronym CAM stands for Common Area Maintenance and CAM charges refer to the cost of services and charges to maintain common areas, including any parking areas owned by the building owner. This can include landscape services, common area lighting, parking lot maintenance, cleaning service for common areas, or even snowplowing if that is needed. The actual expenses are shared by all tenants and are quoted as CAM charges. This is calculated as $XX.XX/SF with the SF being equal to the rentable square footage of the leased area.  These charges are usually paid monthly based on the estimated yearly cost. At year end, the actual CAM charges are calculated and any refund or additional payment is settled with the tenants.

What is NNN when appearing in a lease rate? The term “NNN” refers to any additional actual expense items incurred by the building that are split between all tenants. This may include insurance, property taxes, or CAM if CAM is not included separately. It may be called “Additional Rent” rather than NNN. Be sure to ask exactly what is included in the NNN because it can differ from landlord to landlord. It probably will not include any utility costs except that used by the common areas.

How utility costs are calculated and are they included in the rent? In some smaller office spaces, the cost of utilities may not be calculated separately but in larger spaces, the tenant often has to establish their own separately metered utilities. In some cases, the landlord has all unities metered and the tenant is billed for a share of the total utilities based on the size of their office space.  Be sure to inquire about how utilities are billed and exactly what you are responsible for paying.

What does Gross Rent mean? The term Gross Rent means the landlord is paying all expenses outlined as NNN expenses and the tenant only pays the Gross Rental amount stated in the lease. The utilities may or may not be included in Gross Rent, so be sure to ask.

Can I get a short lease to try out the office space? Most landlords offering leases on commercial office space will not consider less than a one year lease. Some require two or three year leases as a minimum. In general, the longer the lease, the more valuable it is to the landlord and the easier it will be to negotiate what you want.  Don’t plan on less than a one year lease.

I love the office space I found but there are a few things in the layout that need to be changed. How does this work?  The layout of an office space varies from building to building and seldom do you find the perfect lay out. The landlord is likely to be reluctant to spend money on a tenant requested change. It is traditional that new paint, carpet cleaning, and general area maintenance be performed by the landlord. In some cases tenant improvements can be negotiated at the landlord’s expense, often on the longer term leases. In other cases the tenant may negotiate the right to alter the layout at the tenant’s expenses. 

Your best bet is to use ther services of an Office Space Tenant Represenative who will help you through the maze at NO Cost to you, making sure you avoid costly mistakes.

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By: James Osgood

Lease Negotiations , Office Rental , Office Space , Office Space Negotiations

Maximizing the Small Office Space

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Recently smaller commercial office spaces have become the solution for small and medium sized businesses. Some businesses have adopted non-tradition work spaces in which workspaces are shared by whoever needs them at the moment while other team members work on the road or meet with clients. Meeting spaces have becomes smaller and other creative solutions have been implemented to save overhead due to the last few years of tough economic times.

If your business happens to be located in a small office space, you need to maximize the space, both in terms of visual effects and efficiency. The idea is that clients should well welcomed and comfortable while visiting the smaller workspaces and meeting rooms. Here are a few tips for help you maximize a smaller office:

  • Walls: Paint the walls all a single color throughout the office space. Don’t decide to make one room different because it will ruin the visual effect of creating a larger area than actually exists.
  • Lighting: The brighter the commercial office space, the larger it will seem. Dark spaces tend to close in and appear smaller, so be sure to include bright lighting, preferably full-spectrum lights, to make the small office space grow to a larger size visually.
  • Plants: Choose plants that are tall but narrow. Any plant that spreads out widely will close in the space, but tall plants give an up and down visual effect that does not close the space in any way.
  • Floors: Choose a top-quality flooring that is extremely durable and use it throughout your office space. Do not place area rugs over parts of the floor; the idea is to create a larger visual space in your commercial office space by allowing the eye to move from area to area with any breaks in the flooring color or texture.
  • Decorations: Place groups of smaller artwork together rather than placing a single large piece of art in the office. The smaller groups make the brain think that there is more space than is if a large painting or poster is place on the walls. Strategically place a few quality items on tables, desks and other areas; whatever you do, avoid cluttering the areas in your commercial office space.
  • Work Stations: Purchase glass work stations for your office space so that the eye does not really see the object as a break in the visual effect. Large, heavy wooden desks will create a visual break and reduce the maximization effects.

Implement these ideas in ways that suit your specific office space and you will find that the space expands and grows larger. This will allow you to fully enjoy your new, lower overhead without experiencing any negative impacts.  

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By: James Osgood

Flexible Workspace , Office Rental , Office Space , Office Space Design

The Office Lease Signing

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 After you and your office tenant rep have negotiated a lease for your office space that protects the interest of your business and is agreeable to the property owner, it is finally time to sit down and sign the legal document, a binding office space lease that allows you and your team to occupy the chosen space. You should have your tenant rep there to cover any last minute questions you might have.

Having a real estate profession in the person of your selected office tenant rep present may seem redundant since you have sought counsel and advice repeated during negotiations from your tenant rep. Yet, verify that the changes you have requested to the office space lease have been worded correctly in the final document can be tricky for those with less experience. A tenant rep hasthe experience necessary to be sure the wording does not turn a change made to favor your interests into a clause that could trip you up and actually cost you money. Remember, your goal is obtain the best possible office space at the least cost with right to require or have performed the tenant improvements agreed upon and avoid passing rising or extra costs on to you. Another point your tenant rep will re-check will ensure that the rent increases over time do not become excessive.

Do not allow yourself to be rushed into signing the final office space lease without thoroughly comparing the notes you made of requested changes to the final document. Plan at least one to one and one-half hours for the lease signing to allow the thorough review. Whether on purpose or inadvertently, it is possible an important change could have been left out or misworded, changing the intent of the verbiage completely. If any part of the lease does not meet with the changes negotiated, stop the signing process and require an edited lease be delivered before signing.

You should also require a property checklist which itemizes the fixtures provided in the office space. For example, if the landlord is providing a refrigerator or table and chair in the break area, these items would be listed, inspected and any damages, however slight, should be noted on the checklist. Also, all walls, flooring, ceiling, doors, service outlets, and environment climate control units should be inspected during lease signing and their exact condition noted. Any damage, even small dings or excessive wear and tear, should be noted so that when you eventually relocate and release the office space to the property owner you will not be changed for these damages. Your tenant rep will help you go through the property and look for items necessary for your checklist. Many landlords use a standard checklist so be sure to note any items on the list that do not apply to the office space you are leasing.

You will need to bring payment to the lease signing table for the security deposit, any key deposits and rental payments, or whatever other payment arrangement is outlined in the lease. Customarily initial payments include first month of rent but sometimes rent for first and last month is required. Sometimes if significant tenant improvements must be completed before occupancy (be sure this is noted in the lease along with completion dates), or the occupancy date has been established for sometime in the near future, only payment of the security deposit may be required at lease signing with rental payment due upon taking occupancy of the office space. Payments can usually be in the form of a business check, money order, or certified cashiers check and in some cases payment can be made with a personal check, debit or credit card. Most landlords no longer accept cash due to the inherent danger of carrying significant amounts of cash and the possible accounting confusion if business cash becomes mixed with personal cash. Be sure to understand in advance what methods of payment are acceptable to your landlord and arrive prepared with the correct payment in one of the acceptable forms.

Once you and landlord have both signed the lease for your new commercial office space it is too late for further negotiations. You will be given keys to the property and it becomes your responsibility. You can then pat yourself and your real estate tenant rep for a negotiating job well done. 

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By: James Osgood

Lease Negotiations , Office Leasing Tips , Office Rental , Office Space