Look before you leap into an office lease
That moment when they hand you the keys.
That’s a good moment—whether it’s a new apartment, your first house, or a new office for your business. It’s a sense of excitement, fresh potential and opportunity. So, don’t blow it by not doing your homework first.
Because whether your company is just moving out of the garage, or you’re expanding your established business to a new location, leasing office space requires some due diligence (and maybe some outside help) to ensure you’re making the right move for you and your employees.
Four areas to consider
When you’re searching for new office space, it’s tempting to move too fast. But finding the right office lease depends on a number of factors. Here are the top areas of consideration to keep in mind:
1. Type of space
Open floor plans are definitely all the rage right now, and the latest trend does encourage collaboration and transparency. But think through how your company works, including your processes and your overall company culture. For most business owners, the best choice is a balance of open spaces, private offices and quiet enclosed areas. This mix allows employees to choose the space that best meets their needs—such as a quiet area for writing, a small room for team brainstorming or a large open area for collaboration.
But go beyond just work spaces: Do you need a kitchen or break area or training room for employees? What about a wellness room? Be sure to consider any other special areas on your “must” list.
Before you hire the movers, think through the human element of your business—your employees and your customers. Where do they live? Are they primarily in one part of the metro and would benefit from an office in their part of town? Or are they spread out across the Kansas City region where a central location in the city core makes the most sense? Next, how do they travel? Do you need to be near the bus lines or streetcar route? Easy highway access? What’s the parking situation on-site?
It’s easy to get swept up by the allure of a fancy space, but make sure it fits your needs, especially if you’re just starting out, warns Michelle Ames in Forbes:
“I have seen people interested in a space because it is pretty, shiny or the price is high. Consider your budget, first and foremost, which is critical for startups. Committing to a high rental rate to get a shiny space can make or break you … Customers will use your business because of great service, not glitz.”
As you’re crunching the numbers, don’t just consider rent but add in all those potential extras, such as increases in building operating expenses, parking costs, internet/phone/data costs, etc. Find out the real cost of that new space to see how well it fits your budget. Most important, make sure you’re comparing apples to apples: Ask how the leasable square footage is both measured and calculated to avoid any surprises.
The lease and its specific terms can get tricky, and here’s where an expert advisor is really valuable. If you’re a new business, you’ll need to consider your future needs and how flexible your lease is. A lot depends on how you grow (or shrink), and sometimes it’s best to err on the side of a shorter lease. After all, if your business is successful, you’ll be financially able to upgrade or change your situation in one or two years’ time. A shorter lease will ensure you’re not stuck in a longer-term commitment that negatively impacts your business. You should also find out what happens if you need to break your lease, such as incurring extra fees or penalties.
Work with your broker to create a lease that’s as flexible as possible—for both parties. And don’t be scared to ask about lease revisions you may want to add, including the option to expand or the option to terminate the lease after a certain time period. Also, make sure you’re protected against unforeseen events, such as utility interruptions or a major building issue.
Turn to a trusted broker
As you’re preparing to find your next office home, don’t go it alone. Find a trusted leasing expert that not only has a solid grasp of the Kansas City market but also the experience of helping every type of business discover the space that best fits both who they are as a company and where they are in their growth.
Not only can an external partner help you analyze properties, markets and submarkets, but they can negotiate aggressively on your behalf—providing peace of mind that you’re getting the best possible deal.
And that kind of confidence will make those keys feel even better in your hands.
Ryan Biery, SIOR, is senior vice president of brokerage at Copaken Brooks, a full-service commercial real estate firm headquartered in Kansas City and serving the Midwest. The company’s full suite of services includes: leasing (office, medical, retail, industrial and underground), construction management, investment acquisition and sales, tenant representation and HQ relocations, condo management, property management, asset management, and development. Share your thoughts on our Facebook page or on Twitter @CopakenBrooks.