Is an office move in your future? Whether, when, and where to move your office have far-reaching consequences that impact every aspect of doing business, from customer relationships to day-to-day operations to profitability. Did you know that on average, two-thirds of employees who are given the task of managing an office move either quit or get fired within six months of that office move. Our tips and advice will help you plan, manage and execute a successful office move and keep your job!
Businesses move for all kinds of reasons. Maybe they need more office space, an updated image, or a better location. They might be launching a technology startup or moving up from a home office. Perhaps things haven’t worked well with the current landlord or property management firm and it’s time for a change.
Whatever the reason, it had better be compelling because an office move is a complex process. And, according to Karen Warner, author of Move Your Office, the cost of leasing office space is one of a company’s biggest expenses; second only to salaries and wages. Because the decision about whether—and when—to move your office is so critical, it pays to plan carefully and ask the right questions before getting started.
Is an office relocation necessary? What’s making you consider an office move, and are there options for resolving those issues without moving? If you have outgrown your existing space or you need to downsize, your current landlord might be able to accommodate your new requirements. Or perhaps your existing office space could be renovated or reconfigured to be more efficient.
If you need to enhance your office’s image, would a facelift work at your current address? Investigate options for remodeling, updated signage, or even redecorating your current office space with upscale colors and furnishings.
Would a new office location be better for business? A better location in your metropolitan area could bring you closer to your customer base or even attract new business. First impressions count, and the neighborhood makes an impression on every visitor before they even see your office. Even if the location doesn’t impact your type of business, it can impact your bottom line—office space rental rates can vary widely in different parts of town. Also, the right location with the right amenities can help attract and retain key employees.
11 Tips for a Successful Office Move
1. If an office relocation is in your company’s best interest, follow these 10 steps for a successful office move.
2. Work with a pro. Always engage a commercial real estate broker to represent you in your search for office space and to help you manage the entire office relocation. Enlisting the services of the right commercial real estate professional can save time and money throughout and even long after the office relocation process. A broker can provide invaluable information about the local market and help negotiate the most favorable lease terms. Seasoned real estate professionals will also be aware of opportunities not advertised to the public.
3. Give it time. Most businesses spend six months to a year to find the right location, negotiate the lease terms, set up the office relocation logistics, and get moved in.
4. Nominate a moving committee. Form a team of employees at the outset to coordinate the office relocation process and help keep track of all the details.
5. Select a panel of experts. Establishing an advisory team of external consultants and specialists is a critical step. They’ll help you find the right location at the best terms and ensure that your new office space is well-designed and appropriate for your business. Your advisory team could include a commercial real estate broker, a real estate attorney, an architect or office space planner, a furniture consultant, and an IT/communications consultant.
6. Determine your specific needs. With the help of your advisory team, define the requirements for your ideal office space, from the amount of space you need, to the type of building that would be the best fit, to the preferred location.
7. Identify potential properties. Have your commercial real estate broker prepare a detailed list of available office properties that fit your needs profile, including a photo of each building, the size and cost of each available space, and a map with directions to each location.
8. Take a property tour. Your real estate broker will schedule a tour and guide you through visits to each property on your list. Compare notes and determine which three or four locations are the most promising.
9. Conduct a competitive leasing analysis. Once you’ve got that short list of prospective properties, your commercial real estate broker will provide an analysis of the economics of each space and coordinate any preliminary space planning needed, helping you assess how the various potential layouts will suit your business needs. Your broker will also prepare written proposals for each landlord, addressing issues such as rental rate, lease term, building expenses, renewal and expansion options, signage availability, and parking.
10. Select your new building or space. Your broker will compile landlord responses into a spreadsheet giving a side-by-side comparison of each of the properties to help you make the most informed decision about which space is the best fit for your business.
11. Negotiate the lease terms. Next, your new landlord will issue a lease, which must be reviewed by the principal(s) from your company, your real estate broker, and an attorney to ensure that all terms are understood and agreed upon.
The decisions about whether, when, and where to move your office have far-reaching consequences that impact every aspect of doing business, from customer relationships to day-to-day operations to profitability. Considering all the variables, it makes a lot of sense to get professional support and follow a clear plan that helps you make the right move—and make the move right.
Visit www.moveyouroffice.com for detailed information on managing your next office relocation.
Karen Warner is the author of Move Your Office, the best-selling office leasing and relocation guide. Move Your Office is available at www.moveyouroffice.com. Karen’ skill and experience as a commercial real estate broker has helped many businesses manage a smooth transition to their new location. Her extensive knowledge of the commercial relocation process and unique talent as a tenant representative allows her to expertly assist clients in finding and negotiating office space. Karen’s status as the author of three best-selling commercial relocation books gives her the tools and savvy to formulate effective office relocation strategies.Office Relocation , Office Rental , Office Space
It seems as though it has been a couple of weeks of good news for the US office space market. CoStar has just come out with their State of the U.S. Office Market: Mid-Year 2010 Review & Forecast.According to their study, office space vacancy rates have stabilized and office vacancy rates that appear to have peaked and are no longer on the rise .
A few notable points from the report:
Office job growth has spurred positive net Office Space absorption. Office Vacancy Rates have peaked with some office markets even reporting Increases in average office Rents.
Of the 20 largest office markets, eight of them posted positive net absorption so far this year, three of them had little or no change, but nine did post negative net absorption. Washington DC led the country with 2 million square feet of net absorption followed by Denver with 1.6 million and Minneapolis with 1.3 million. New York City had 2.8 million square feet of negative net absorption, Los Angeles with a negative 2 million and Philadelphia at negative 1 million. But even the markets experiencing negative absorption were doing so at much reduced levels compared with last year.
New York, Long Island and Minneapolis office space markets are all now reporting single-digit office space vacancy rates of 9% or less.
If the current pace of office space absorption and delivery trends hold, CoStar projects the office vacancy rate will go from 13.6% to less than 11% sometime in 2013.
From a commercial real estate perspective, as long as you have any net job growth, it is eating away at the vacancies out there. The most important thing here is that this positive employment growth in the office sector will be reducing standing inventories of (available) space.
This is the second recent report of positive news in the Office Space arena. Just a few days ago we posted Office Space Vacancy Rates in US CBDs Fall Slightly, now this. Hopefully it will be the first few of more to come.
WASHINGTON, July 12 /PRNewswire/ -- For the first time in two years, the demand for office space exceeded what was returned to the market, according to Cassidy Turley's latest National Office Trends Report.
Cassidy Turley reports that with demand up, national office vacancy rates remained flat when compared to the previous quarter at 16.9%. Still, this is the highest vacancy has been since 1993. Of the 80 major metros tracked, 40 posted increases in vacancy and 35 markets posted declines.
According to the report, national rents are stabilizing, but not appreciating. Average asking rents fell slightly, down $0.17 compared to the pervious quarter, to register at $21.56 in the second quarter of 2010.
"In terms of recovery in the office market sector the fundamentals have improved, the demand has improved - especially in Washington, DC, New York City, and pockets of California," said Kevin Thorpe, Chief Economist at Cassidy Turley. "These are the segments of the market that are clearly outperforming the rest of the country. Investors are targeting quality assets in these markets and pricing has moved up dramatically from the low point it hit in 2009."
According to Cassidy Turley, the U.S. economy created 116,000 office-using jobs in the second quarter of 2010. However, recent economic data suggests that the economy may be losing steam as we enter into the second half of 2010. Private sector job creation, in particular, has been disappointing in the May and June employment reports. Even under bullish economic scenarios, unemployment will not reach pre-recession levels prior to 2013.
Cassidy Turley reports that U.S. office sales volume is up 39% compared to this same period one year-ago – at $7.42 billion. Net absorption was positive 6.6 million square feet in the second quarter of 2010, marking the first period of positive demand since the first quarter of 2008.
The report also finds that the development pipeline has slowed dramatically. There is currently 32.8 million square feet under construction, compared to 41 million square feet delivered in 2009 and 61.1 million square feet delivered in 2008.
"The growing uncertainty regarding the recovery and surrounding the regulatory environment will slow the recovery in the office sector, but it will not derail it," added Mr. Thorpe. "Office-using job growth will continue to be slow in 2010, but as businesses regain confidence in the self-sustaining expansion, hiring will pick up in greater numbers in 2011 in order to keep pace with growing demand. For the office market, 2010 will be the year of positive demand for office space, 2011 will be the year of stabilizing vacancy, and 2012 will be the year of rental appreciation."
Bloomberg July 8, 2010 - Office space vacancies in U.S. central business areas fell in the second quarter from the prior three months, the first drop since 2007, as companies hired workers and took advantage of lower office space rents, Cushman & Wakefield said.
The average vacancy rate in central business districts fell to 14.8 percent from 15 percent at the end of the first quarter, the New York-based broker said today. Sixteen of the 31 cities tracked by Cushman had declines in vacancies, the company said.
“Markets throughout the U.S. continue to strengthen, as it becomes strongly apparent that the national vacancy rate for CBDs has peaked,” Maria Sicola, executive managing director and head of Americas research for Cushman, said in a statement.
Office vacancies in both central business districts and suburban areas rose to 17.4 percent in the second quarter, the highest since 1993, New York-based research company Reis Inc. said July 6. Cushman’s figures are for central business districts in cities including New York, Washington, D.C., Philadelphia, Boston and San Francisco.
Some office landlords cut their rents to fill space, Cushman said. The average rent fell to $36.49 a square foot from $36.88 in the first quarter. Nineteen of the 31 districts covered in the survey had quarterly declines in rates and 13 of those had drops of less than 3 percent, a smaller decline than in past quarters, Cushman said.
“While there is still substantial competition among landlords to offer the best deal to prospective tenants, rental rates are nearing a bottom in several markets,” Sicola said.
The U.S. has added 882,000 jobs since the beginning of the year, according to the Labor Department. The drop in office vacancies in the second quarter followed nine straight increases dating back to the last three months of 2007, when the rate bottomed out at 9.7 percent, Cushman said.
Manhattan’s three submarkets -- Midtown, Midtown South and Downtown -- had the lowest vacancy rates among the central business districts tracked by Cushman. Midtown South’s vacancy rate fell to 9.3 percent from 9.9 percent in the first quarter, Downtown’s rate was little changed at 9.9 percent and Midtown’s rate declined to 11.5 percent from 12.6 percent.