A great office space can WOW visitors, increases employee productivity, and promotes your business’ image. Choose the wrong space and you may find yourself with lackluster sales, low employee morale, and a floundering business. The key to finding the perfect office space, according to the U.S. Small Business Administration, is to perform a comprehensive assessment of potential locations. Make a list of “must have” attributes. Check out our office space planning checklist to help yourself focus your search.
1. Know the Zoning Laws
Zoning laws vary considerably by location, so it’s essential to become familiar with the regulations in your area. In general, you cannot construct a commercial building in an area zoned for residential property, the SBA notes. To check how a potential property is zoned, contact the planning agency for your municipality. Work with city officials to pay necessary fees, apply for licenses, and complete other paperwork to comply with zoning codes. If you run into trouble, hire a land use attorney to help you navigate complicated local regulations.
2. Understand the State and Local Taxes
Make sure you have a clear understanding of the taxes that you will owe to both the state and local authorities. These can vary significantly from jurisdiction to jurisdiction. You can usually find out information on the jurisdiction’s website or consult your accountant.
3. Consider Your Visitors and Clients
Think about what types of people will be visiting your space. Will the office be used solely by employees, or will you hold client meetings there? Do you need teleconferencing capability? Does it need to meet industry regulations (such as those set by OSHA or another agency)?
The answers to these questions vary widely based on your business plan, but they significantly influence the type of office space you need. For example, if you want to impress new clients, consider an easily accessible downtown location or a luxurious entrance with a blazing fast internet connection
4. Choose a Location That’s Convenient for Employees
Your business can only be as great as the people working for it. To retain the best employees, carefully consider your office location. If you live in a city with a strong public transportation network, choose an office space near prominent bus or train lines. To make your office commuter-friendly, find a location with ample parking. Also consider perks that improve employee satisfaction, such as an on-site fitness room or a well-equipped break room, suggests Forbes. Thinking about your employees’ needs before you hire them will allow you to attract and retain the best candidates.
5. Decide on a Floor Plan That Complements Your Business Model
When possible, find an office space that requires the least possible renovation to save on costs. To achieve this goal, think about the type of office floor plan that makes most sense for your company. A tech start-up developing a new smartphone app might benefit from an open floor plan that allows employees to easily share new concepts. In contrast, your tax accounting firm may require private offices for each worker in order to increase client confidentiality.
When touring a potential property, consider your desired floor plan and whether it is possible to execute in the space “as is” or if you will need tenant improvements. According to the Harvard Business Review, the most effective floor plans bring employees together to share ideas while providing some private space. Think about the placement of executive offices, conference rooms, bathroom facilities, the reception area, and break rooms. Consider hiring an industrial-organizational psychologist or consultant for tips on how to best use office space to maximize employee efficiency.
6. Get Help From a Professional
There are specialists in your market who specialize in helping business not only find the right space, but also ensure they negotiate the best possible deal. They are known as tenant representatives. Like residential real estate brokers, they represent the buyer (or lessee) who is looking for property, but get paid by the landlord. In other words, there is no cost to you for their services and they are looking after your best interest. They only get paid once you are happy with your selection and make a purchase or sign a lease. They are an invaluable asset and in important team member for any company looking for office space.
While these are not the only factors to take into consideration when looking for office space, taking these 6 factors into account will help smooth out the process.
If you need help finding and negotiating for office space, please contact us. Our services and the services of our member tenant reps won’t cost you anything.
Perhaps you operate a small start-up business that has outgrown your home office. Maybe your company is mid-sized and is growing out of the office space you occupy. Or, you may head a large organization that needs an additional facility to support a new contract. Whatever your situation, you’ve realized that you need to lease some office space.
You are now in one of the most exciting and challenging parts of your growing company, acquiring an office space, but alos one that is priime for making expensive mistakes. An office space lease is usually the second biggest expenses after salaries for a business. There are ways that you can do it to get the best office for your business without compromising your budget or other aspects of your business’ growth.
You’ve begun the search for space. You may have used an online commercial office location service such as OfficeFinder.com, a local commercial real estate broker or you may have searched by driving by empty facilities. Whatever method you used, you’ve found the perfect option for your every need. It is in a strategic location, plenty of space for employees and clients, good security and good facilities.
During the process you have analyzed and understand your business needs for space, not only for the present but for the future too. You know how you will use the space, what are the amenities needed and identified your priorities.
Finally, you’ve decided. You are now ready to move on to the next phase of acquiring an office space, negotiating the best office space lease.
Understanding the Office Space Lease: LEASE 101
An Office Space Lease has three main forms:
Lease is an agreement between the property owner or landlord and the tenant. It has three forms:
Full-Service Lease – the rent is all-inclusive. The pay covers all of the expenses associated with the property, such as insurance, maintenance, taxes and even janitorial services.
Net Lease – the landlord charges a lower base rent for the space and all of the usual costs that related to operations, maintenance and use that the landlord pays. Net lease also comes in three types:
Triple net lease – you share the three additional costs about the base rent. Taxes, insurance and maintenance.
Double net lease – two additional costs are added on the base rent, taxes and insurance costs.
Single net lease – some of the landlord costs will be charged to the tenant upon negotiation.
Gross Lease – this could the most favorable lease for the tenant. The landlord shoulders all of the property expenses that would come across in a net lease.
To obtain a lease for the office space, you should have an experienced guide who will have your best interest at heart and who has negotiated many successful office space leases in the past. A tenant rep broker is a necessity. It’s a sure bet that the landlord or property management company offering the lease has plenty of experienced assistance to help them get an advantage. Shouldn’t you have an expert on your side too? After all, there is no cost to you for their services. It would seem to be a no-brainer.
Protect yourself by following some important guidelines
that can help you negotiate successfully.
Always remember that in negotiating an office space lease, the more knowledge and power you have, the better the outcome. Even with a tenant rep, you will need to stay involved. Find out about the space. Is anyone else looking at it? Has it been vacant for a long time. Aside from having a tenant representative or a broker, it is still important that you are hands-on with the search and you are aware of the important factors, factors that may somehow make a change on a burdensome leasing terms made by landlord throughout the lease process.
Once you’ve told the office property owner that you want to locate your business in their property, you are likely to be presented with a standard lease package. Do not sign any papers at this point but accept the lease for review. Explain to the landlord that you must review the lease with care so that you completely understand it.
Your specific needs are unique and may require significant changes in the office space lease during negations. Here are a few specific points that any tenant should look for in the standard lease package:
An accurate description of the office space should be clearly listed in the lease.
How much is the rent and exactly when is it due? Are there any late charges if not paid on the correct date?
Is there a security deposit and how much is it? Under what conditions is this deposit repaid upon vacating the commercial office space and what conditions permit the landlord to refuse to return the security deposit?
What is the lease period and are there provisions to facilitate lease renewal if desired?
What are the terms in the lease regarding vacating the premises early? Do you have the right to move into another, larger office space owned by the landlord without penalty? Do you have any rights to rent additional space if your business grows more rapidly than anticipated?
Is there a cleaning deposit for preparing the space for the next tenant when you vacate the premises and is this fee returned if you leave the premises in the same condition as upon delivery?
Identify verbiage defining how much parking may be used by the tenant and what, if any, number of spaces can be marked as reserved.
Review all references to use of common space. You should have the right to enter and egress at any time of day or night and access to all common spaces unless specific restrictions are contained in the lease. Also, watch out for clauses regarding common space upkeep or charges.
The lease should clearly state what utilities are the responsibility of the tenant as well as what should be paid by the landlord. The same goes for charges for maintenance and repairs for any problems not the result of misuse or neglect on the part of the tenant.
Is there are space in the lease or reference to an addendum where notes regarding the condition of the property at delivery may be noted.
Is there any defined allowance for tenant improvements?
What rights to signage are included in the office space lease?
Does the lease provide for delivery of a punch list after tenant improvements are accomplished?
Some suggestions to help you become a little more of a lease-expert
Length of Lease and Renewal Options:
The initial office lease period should give you enough time to settle in and determine how this location works for your business but not so long that you must pay a stiff penalty if you decide to move on after two or three years. Try to negotiate a shorter-term lease with a renewal options. Keep in mind that your company’s needs may change, you might get sucked into an office space lease that is too big or small, or with a rent that is above-market if demand for space later drops.
Watch out for the clause that establishes the amount or percentage at which rent can go up and the specific periods at which this change can occur. Rent should not increase more than annually and should have a reasonable cap set on it so that the cost of leasing the office space does not become outrageous in a short period of time. Usually, landlords refer the annual increases on the percentage increases in Consumer Price Index or CPI, try to arrange for a CPI rent increase that does not set in for at least the first two years of the term. Then, you can try to have the cap on the amount of each year’s increase.
Be sure you and your office lease broker understand exactly what costs can be passed long to you or what percentage of those costs can be passed along. Examples can include property tax increases, specific repair costs not caused by your occupancy and the increasing cost of services to the building. Your rent increase should cover the costs associated with increased service costs or taxes and only those building repairs caused by you should be passed along to you.
Landlord’s Right to Early Termination
Check what verbiage is used regarding what, if any, rights the landlord has to terminate your office space lease early and what conditions must be met to justify such early termination. If this clause is too liberal in favor of the landlord, you could easily find yourself seeking different office space much sooner than your business plan set forth. This can be expensive and time consuming for your business and can be avoided with the right wording in this area of the lease.
Repairs, replacements and improvements:
Be mindful about the office space lease clause that says that the tenant must restore the property to its original condition. If this was mentioned to the agreement, try to state that it will be returned to in same condition at the beginning of the least EXCLUDING (1) ordinary wear and tear, (2) damage by fire and untoward incidents, loss or casualty not the fault of the tenant, (3) improvements approved by the Landlords.
Payment from Corporate Owners:
Watch out for verbiage indicating payment can be sought from the corporate owners rather than the corporation itself. While some office space owners like to have this protection in the event a business becomes financially insolvent, it does give a landlord too much recourse into the business owners’ private finances to allow entry into the final lease.
One-Sided Lease Provisions:
Be cautious about the landlords that use form lease agreement that can be one-sided. Negotiate on the provisions that are favorable to the landlord. Below are the common types of provisions that one-sided and landlord favorable:
Passing on to the tenants, without limit, increased operating costs like property taxes, repairs and or insurance expenses.
Landlords disclaiming responsibility for compliance with environmental laws or government act (e.g., disabilities acts)
Requiring tenants to pay for tax increases
Landlords reserving rights to terminate the lease at their convenience.
Prohibiting subletting and assignments.
These are only a few of the clauses that an office space renter should be on the alert for. Turn to your office space broker for the best possible advice on all areas of the lease and lease negotiation process.
There are dozens of additional points that will stand out in the lease. Some of them may be points you do not understand. Make sure to highlight these for investigation. Another verbiage may better meet your needs. Highlight each portion of the lease that either is unclear, misleading or requires negotiation. These are items that you will need to cover with the help of your leasing team, especially your tenant rep.
When negotiating an office space lease or rental, you will find that the devil is hiding in the details and these can cost you lots of money over the life of the lease. Turn to your office lease broker, tenant represetnative, for experienced advice regarding how to negotiate out these demons before signing an office space lease. An old idiom says “God is in the details” which means that attention paid to small things has big rewards. In this case, your goal is to turn those devilish little hidden clauses into the best possible agreement with the landlord for your office space so that everyone can live with the lease for the life of the lease.
We are here to help. It is what we do every day. If you want an expert to help you get the right space with the best possible terms, contact us. We’d be happy to help
Everything is evolving, fast paced and on the go. We are now in a generation that everything has changed, from “how” we work and even physical places “where” we work. One factor that affects staff’s productivity is the workplace. Development in technologies are helping and creating more smarter and more flexible techniques for workspaces. So, you think you might want to change your traditional office into an agile workplace but have no idea how or where to begin.
First, let’s define Agile workplace, the concept is activity-based working space and making the work space flexible. It is an office hoteling reservation technique or set up in a workplace. It is a way of utilizing a work area more efficiently, utilizing non-assigned seating arrangement and desk-sharing to maximize and creating collaborative spaces.
According to Allwork.space, an online news publication about trends, tips and insights from the flexible workspace industry; agile working makes sure to combine efficient use of the space with collaborative working and the need to recognise concentration and contemplation, through agile working principles, it shows how to create and allocate space and furniture according to the tasks to be performed rather than status or rank. They also mentioned that there are five main components to an effective agile office:
An open floor plan. This physical openness allows for easy collaboration between employees, increases the amount of natural light to enter the workspace, and is an extremely efficient use of space. However, the cons of an open floor plan include the potential for an extremely loud environment, distractions from deep work, or difficulty with private conversations.
Breakout areas. These are spaces that can be used for many purposes and are intended to foster creativity beyond the confines of a typical conference room. They allow space to eat, relax, and create areas for employees to have ad-hoc brainstorm sessions. Again, potential negatives could be difficulty with confidential conversations or noise if clear guidelines of use are not put into place from the start. Areas like these could consist of tables, booths, couches, collaborative desks, etc.
Quiet zones. These are also known as hot spots for focused projects, on-demand concentration, or confidential conversations. Quiet zones require careful oversight so that they are respected by all members of the team. These areas should have some kind of boundaries, like cubicle walls.
Touchdown areas. These are spots for overflow workers to utilize, especially if they’re only in the office periodically. They can be used for short tasks, like answering email or knocking out quick assignments. These touchdown areas could consist of bar stools along a counter or a shared couch., Keep in mind that these workstations are not ideal for long periods of sustained work and are not designed for that purpose.
Easy access to resources. Employees should have easy access to essential resources like physical documentation, equipment, supplies, printers, and copiers when needed. However, be cognizant of where these resources are stored; in an agile workspac,e it’s important to eliminate as much noise intrusion as possible. Ideally these won’t be set up too close to work areas.
How will Agile Workplace benefit your business.
Big chunks of the business’ money go to the space – spaces that are under occupied. Practicing agile workspaces are resulting to significantly cheaper expenses in terms of fit-out and occupational costs. It can free up space for other work purposes.
Increase in productivity and efficiency.
It providing an activity-based working environment that allows your staff to work from any arrangement they choose and creates combination of focused, collaborative, creative work that leads to more productivity. Your business will have the ability to work when, where and how employees find the most suitable and comfortable. It will also help reduce absenteeism, by enhancing your workplace, you are also improving staff motivation and enjoyment at work, it lessens burn out and boredom at work. It makes them more energized and excited. By giving your staff the freedom to choose and to be flexible with their expertise, tools and specially workplace, it will allow them to make good decisions that lead to improvement of their performances.
Getting and retaining best talents.
Great examples are companies like Google and Unilever, they have the outstanding reputation as employers. They achieved this by inspiring a workplace and how they value their workers, in return they get loyal employees and performers.
Improved Employee Performance.
The foundation of a successful workplace is its well-designed environment. Strategically designed workplace will help your team to be more dynamic through allowing members to choose the best place and time to perform their duties and tasks. It also impacts Employee Engagement. It boosts the flexibility in communication and staff engagement.
It can adhere to your changing workforce.
Whether business expansion or contraction, your business is very well prepared with all of fluctuation because of its flexibility.
How will you transition your traditional office to an agile office?
From the experience of businesses that have successfully performed the transition, we’ve collected some steps that will help you.
Do Your Research.
Research on the Internet net and learn about the types of companies that have make successful transitions. Look for ways where your business is similar and ways in which it is different. Do a study on your office over the period of a week or more and assess the actual occupancy. If you find your company office space has 20% or more vacant on average, then this may be a good alternative for you. The higher the normal vacancy rate, the better suited to office hoteling. If you find you run 50% or more vacancy, it only makes good sense to implement office hoteling.
Identify Employees Not Suited to Office Hoteling
Look at your skill mix. Few companies have 100% of their employees away from their traditional workspace the majority of the time. Your receptionist, office manager, some executives and management are in the office on a 90% or greater basis. The traditional office is where they perform their jobs. Those workers should be included in the office hoteling plan as permanent on-site and should remain with their traditional assigned workspace. Choose employees available for agile working is the key to making work more efficient for the hoteling workers once the transition is made.
Determine the Maximum Employee Density on an Average Day
Having looked at average occupancy vacancy rates previously, you should be able to translate that study into a highest average occupancy rate. The lower the occupancy, the more money you can save, but you need to be careful to provide enough hoteling workspaces. If not, you could find unhappy employees standing around waiting for workspaces. It is far better to set up an extra workspace or two to be on the safe side. Office hoteling workspaces don’t have to be large or take up a lot of square footage. Better too many than too few.
Choose an Easy to Use Office Hoteling Reservation Software
When employees choose to come in to utilize a workspace or conference, they will need to log into a control system; the office space hoteling reservation system. By entering a unique identifier, they can pick any available workspace to use for their time in office. They can reserve a meeting room if a client gathering is their purpose, even reserving those spaces several days before the meeting. When the employee has finished using the space they reserved, they simply log out of the office hoteling reservation system, or in the case of a meeting room, might close out their meeting room use and select a workspace to make calls or type up minutes of the meeting. A good office hoteling reservation system will even know which workspace they are using and allow the receptionist to route their calls to where they are at work. Here are the different types of tools that are very helpful to achieve an agile workspace.
• Room booking tools: Bookings can be done in a common system or terminal or through an internet portal. It automates the task of booking meeting rooms, displaying the status of rooms at all times.
• Desk booking tools: same with room booking tool, automation can also be applied to the task of assigning shared desk resources. Staff can book a desk remotely and can secure a space when they arrive. Usually, digital displays on desks can also automatically indicate its availability.
• Digital Sinage: there are installed digital signages in the office that assists employees working from different offices and locations find their way to departments, meeting rooms and other facilities. The signs can be changed easily when needed.
• Occupancy sensors: providing a real-time data on spare capacity levels, it can also help the monitor activity level and can help capacity planning.
The most commonly used software being used by larger organizations is the Microsoft Outlook. Internal IT Team can help to set up by adding rooms as “resources” in outlook calendar. It’s very user-friendly, in your own calendar, you can easily check if a room or a workstation is in use, blocked or available.
There is Help
Office Hoteling is not a new field and there is help available. There are consultants who specialize in this field and can help you with the transition. it is not necessarily inexpensive to implement an office hoteling system, but it results in savings on average of 30% – 40% of your office rental costs. It is well worth the effort.
IF you need help finding office space where you can create and agile workplace, we are here to help.