Q: Due to the slow economy, my company has cut back and now we do not need our current office space. What can we do with it?
The most important thing to always remember is that your company has signed a legally binding agreement with your landlord to pay a monthly fee for your office. The landlord expects you to abide by that agreement and always pay your rent on a timely basis. Typically, your landlord will not negotiate with you if you are not current with your rental payments. However, you do have some options to consider. If you have a good relationship with your landlord, the first step is to discuss your situation with the landlord openly and honestly. Sometimes a landlord will offer you a few options such as a payment plan to get you over the slump or assist you with finding someone to take your space, just to name a few. Also speak to your office neighbors. Do they need additional space? Would they be interested in your office? Do they know another company that might need office space? You should also consider retaining the services of a real estate broker to assist you with a sublease or an early termination of your lease. You would pay a fee for this service; however, it is paid once the broker has completed the assignment. A competent broker should clearly explain the current market conditions and estimate the time necessary to sublease your space.
Q: We want to renew our lease with our existing landlord. We have been here for years, so why would we need to use a real estate broker?
You want to make sure that the playing field is level when negotiating your lease renewal. Your landlord negotiates leases every day and you do it perhaps once every three to five years. Who do you think understands the process better? This year I have seen several cases where the long-term tenant negotiated directly with the landlord and got stuck with an “above market” deal. They regretted their decision not to use a tenant rep broker. The most surprising fact is that your landlord will pay your real estate broker, so you have no out-of-pocket cost. Your real estate broker should know the current market conditions and have information about recent transactions in order to use this information to assist you. Just make sure that you are choosing a real estate broker who focuses on the type of commercial real estate you occupy. Real estate professionals focus on different areas of real estate, so make sure you choose someone who is knowledgeable about your type. A residential broker will know everything about buying and selling house; however, his knowledge of office product will be limited because there are virtually no similarities.
Q: How much does it cost to move my office?
Moving your office seems to be an overwhelming task to many people, however, once it is broken into several phases the project becomes manageable. Planning and an attention to detail is key to a successful move. The first step is to discuss your move with your computer and phone vendor(s). Obtain a preliminary estimate from them. An industry standard cost is approximately $125 for each phone and computer line. Next contact a reputable moving company for an estimate on the physical move. Modular furniture (cubicles) cost approximately $250 per station to break down and re-construct. The physical move and cost of the electrician to hook them up is additional. The most important thing is to always get competitive bids for each element of your move. Your long-time phone vendor may be more competitive with his estimate when he learns that he must compete for your business. Moving is also a good time to consider upgrading technology, replacing furniture and other changes to your office environment. An experienced team of vendors can move most offices over a weekend. Your phone and computer vendor should get access to your new space during the construction to make the installation easier and quicker. Your moving company should provide you with boxes weeks prior to the move, so your staff can have ample time to pack. Make sure you have a simple labeling system and mark everything so the movers deliver all items correctly. This will save a lot of time in the aftermath of the move. Don’t forget to order new stationary, business cards and send announcement cards with your new address to all key business contacts.
Contact me, Elizabeth Santos, at 305.779.3133 for a free lease analysis.