Parallels can be drawn between the growth of a plant and a business. Both require care and nurturing in order to develop, and each can eventually grow to a point where they need larger space to thrive, says William D. Saltzman, SIOR, CCIM, Executive Vice President and Director of Office Services at Cushman & Wakefield/CRESCO Real Estate.
Just as a pot can limit the growth of a houseplant, an office facility that doesn’t have the appropriate space and functionality needed to accommodate your business can be as restrictive, Saltzman says. But before you embark on a search for a new business home, you and your team should consider a number of questions.
Smart Business spoke with Saltzman about the most important things to think about when evaluating your office space needs.
Is your business based in the right part of town?
A growing number of businesses are concerned with attracting and retaining top talent. As a result, many firms like the idea of being based in a downtown setting. The whole live, work and play approach that appeals to a growing segment of the workforce has changed the business model of many companies. Employees often prefer the ability to walk to work both from a cost standpoint and for the health benefits they get from the additional exercise. Residential properties are increasingly more available and popular in cities like Cleveland and, with the accessibility of ride sharing services, some are now convinced that they no longer need a car. As you look to hire the next generation of employees, this could be something to think about.
Does your building convey the right image?
Although ‘location’ is often cited as the No. 1 rule in real estate, the impression your space makes when you are visited by potential customers should also be at the top of your list. Some businesses require the prestige of being in a downtown skyscraper with outstanding views, an attractive lobby and amenities such as a restaurant or fitness center.
Others may prefer the ‘vibe’ of a brick-and-beam working environment that may offer more character than a traditional office setting, improved with painted drywall and a suspended ceiling. By understanding your business priorities, experienced real estate brokers can help guide you in the evaluation to the most appropriate solutions for your space requirements.
Have you thought about hidden costs?
Every company pays close attention to its monthly rent and utility costs. But you need to have a comprehensive understanding of all of your occupancy costs and the relocation process. If there is work that needs to be done before you move in, how much of that cost will be covered by the landlord?
If your current lease doesn’t allow sufficient time to get everything in place to make the move, you could be subject to a ‘holdover’ clause, whereby rent will be charged at a premium in your existing location. These are just a few of the many reasons why you need to pay close attention to the details and work with a broker to negotiate business terms and a lease structure that protects your business interests.
How can you streamline the relocation process?
Start early. Discuss your anticipated needs with your broker. Give thought to items that may have slipped through the cracks in the past, such as offsite storage, public transportation, signage, security, governmental regulations and high-speed connectivity.
If you are evaluating the merits of using a broker, you need to think about who on your staff would otherwise manage all the aspects of the project, from researching alternatives, selecting a location, negotiating final terms and coordinating the move. How much time will you allocate internally for this work? What is your time worth to you?
The assumption that you can save money by not hiring a broker or using an attorney may be overshadowed by the expertise needed and the time to be devoted to make it a success. A cost-benefit analysis can help you determine if this is true.
Insights Real Estate is brought to you by Cushman & Wakefield/CRESCO Real Estate