If you're anticipating the need to expand into more space, lease your first office or relocate your company, you may wonder just when you should begin your search for the perfect office. The answer is probably earlier than you think. Read on to learn more about the time factors to consider when determining when to begin your search.
1. Evaluating Your Needs
Before you even begin to search, you'll need to evaluate your needs, taking the time to consider size, locations, finances and the needs of your team. It's a good idea to involve your entire management team in this process to ensure that you get a well-rounded look at your requirements. Depending on the size of your company, this step may take one week to a month or two.
2. Hiring a Tenant Rep Broker
Securing the help of a tenant rep broker is an extra step in the process that can save you time moving forward. Tenant representatives can simplify every step, and their fees are paid for by the landlord rather than your company. You'll want to devote a few days or weeks to interviewing prospective brokers and checking their references.
3. Conducting Market Research
Next, it's important to get a clear picture of the market in the location where you'll be leasing an office. Find out what the average rental rates are, what amenities are common and what the hottest and most popular buildings in the area are. Commercial real estate software and a tenant rep broker can simplify and hasten research.
4. Considering Offices
Once you have an understanding of the current trends in your area, you can begin researching and touring offices. It's a good idea to start with 5 to 10 options and then continue searching until you have two to three strong candidates. You'll want to keep your second and third choices as backups in case difficulties arise during negotiation.
The negotiation process for commercial leases is usually very lengthy. You can expect there to be several rounds of offers and counter offers before you reach an agreement on a final document. Then, your attorney will need to review it before you sign. Companies may spend a few weeks reaching an agreement and signing the final contract.
Often, offices are built out to suit the needs of the tenant with costs being paid for by the tenant, the landlord or a combination of the two. Regardless of who is paying, build-outs add to the length of time that it takes for your office to be move-in ready. Basic tenant improvements may take only 2 months, while extensive remodeling could add up to 6 months to your wait for your move-in date.
The Bottom Line
The average length of time that companies begin the commercial leasing process is 9 months in advance, but as you can see, that can put businesses in a major time crunch. To complete the entire process at a leisurely pace, you can spend as much as two to three years researching, negotiating and building out your new office. A year to 18 months before you need to move in may be a more realistic deadline for some companies. If you're considering a commercial lease at all, the sooner that you start the better.
Here are a few other articles we think you'll enjoy: