Looking for Space
Senior Vice President
Grubb & Ellis Co.
If you don’t have a good broker, interview a couple and pick a competent one who has experience in your specialty and geographic region. People end up driving around calling up (numbers) on a bunch of signs, not getting anybody really to commit to working with them because they won’t commit to working solely with one broker.
A lot of companies, especially smaller corporations or companies that don’t have real estate directors, don’t really know precisely their requirements and needs. That is what a broker can help you define. It’s just not size. It’s power requirements, office layouts, how many doors do you need and dimensions of the building.
Companies also need to have enough lead time for the move. We find a lot of these companies start looking when their lease is coming up in three months. They cut themselves short so they are in a bind. The more you are in a hurry, the fewer options you have. I would say leave a minimum of six months to a year, depending on market conditions and any special building requirements.
Corporate Managing Director
Julien J. Studley Inc.
Consider the effects on your employees and your customers. For example, look at the demographics for how long is the drive time for your employees at that location. A lot of times companies fixate on the economics of the deal. They weren’t looking at the whole picture and then they say, “Whoa, we lost some of our employees, because they didn’t want to move over here.”
Don’t always assume that the lowest rental rate deal is going to be your least expensive deal. It doesn’t mean it’s the most efficient building. So you may have to take more square footage to compensate for that, or the parking is more. Or the operating expenses are more.
It’s important to consider your exit strategy. Not all tenants go the length of the term of their lease, either by rapid growth or because they need to downsize. So when considering a location you should look at the feasibility to both grow at the site or if you need to sublease and get out.
Senior Vice President
Trammell Crow Co.
A lot of times companies don’t really understand the total costs of new offices. There are all kinds of costs associated with a move. There are moving costs, cabling and telecommunication costs, architect fees, etc. A lot of times they don’t properly budget and get stuck with it at the end of the move because they didn’t realize it. They are focusing on rental rates and tenant improvements. What we try to do is go through it from the start to the finish.
Clients need to not second-guess their brokers. It could be a law firm with 20 partners and each of them knows somebody in real estate. “Oh, I heard so and so got this deal,” when in reality they hear what they want to hear but they don’t know the details.
Also, stay objective and non-emotional. Don’t get attached to one or two buildings. “Oh, it’s across the street from the Jonathan Club,” or “Oh, it overlooks the ocean.” If you fall head over heels for a space, the landlord knows they have you.