As exciting as looking for new office space can be, it’s also a daunting undertaking. Whether you’re looking for your first permanent office space or hoping to expand, the process is very similar. Aside from the logistics of actually relocating, ensuring continuity of business, and finalizing the lease negotiations, you’ll need to take one crucial factor into consideration: timing.
The best time to start looking for office space is hugely dependent on your own situation. Real estate brokers and landlords alike will be pushing to close a deal as soon as possible, but remember one thing: you know your business better than anyone else. There’s a certain level of gut feeling that goes into making such a substantial investment. With this guide, you’ll be better equipped to determine when you should begin looking into additional office space and establish a foundation for your company’s future.
When’s the Right Time to Begin Looking for Office Space?
The common consensus in seeking new office space is this: you can’t start early enough. Most commercial real estate transactions take several months and involve a bevy of professionals. From building inspectors, local permitting, real estate brokers, and contractors, you’ll likely be waiting to move into a new space at least 3-6 months after you’ve signed a lease.
Even if your company isn’t quite ready to move into a new space, your sales and growth projections should show exactly when you’ll be outgrowing your current space. Utilizing those figures, you’ll have a clearer picture as to when is the right time to move locations – but that should include the search process. Once you’ve hit your goals and have reasonable growth projections nailed down, you’ll want to start looking for new office space right away.
Of course, your company’s finances will determine just how much you can afford, so before you begin your commercial real estate search, it’s important to reduce any financial liabilities on your books. That could include business or personal debts, loans, or lines of credit tied to your company and its stakeholders.
In order to get a clearer picture as to your company’s ability to lease a new property, you’ll want to employ a business analyst, a tenant rep broker, and a real estate attorney to help you negotiate a lease agreement in the future. As for your company’s participation, the best plan of attack is to designate a small committee to begin searching for a new property about a year from a desired move-in date (ideally, this would closely coincide with the termination of your existing lease agreement). Set a criteria: desired square footage, budget, lease term, amenities, nice-to-have features, and essential components for your next space.
How to Reduce the Length of the Search Process
While it’s easier than ever to find suitable commercial real estate spaces, the biggest deterrent to a speedy transition is the lease negotiation process. That’s why it’s so important to make your company as attractive as possible to prospective landlords. That means getting pre-approved for business loans, establishing your needs and priorities when it comes to a particular space, and showing a willingness to move quickly in order to get a deal done.
Moving quickly requires expertise, and a tenant representative broker has exactly that. With their experience in the market, relationships with other landlords, and savvy with the transaction process, they should be able to take your lead and get a deal done fast – to your ultimate benefit.
However, an eager potential tenant could demonstrate desperation in the eyes of a landlord and could hurt you in the negotiation process. It’s a tricky tightrope, but having several options available to you throughout the negotiations will help with leverage and provide a fallback in case things go south with one option.
What to Keep in Mind While You Look for New Space
There’s no way to tell exactly what your company needs without knowing the nature of your business and your culture. That’s why it’s so important to bring in your internal team for the search process. Creating a search committee within your existing organization won’t just be a great asset for you when looking for a new property, but it will create a sense of inclusion in finding your next home.
Aside from the personnel considerations, you’ll want to consider each property based on your needs. If you simply need an office space, determine what priorities you’d like to set to improve conditions for your team and make the best use of the available – and hopefully – larger space.
If you’re operating in a specialized industry, look for opportunities in the vacant space to improve and upgrade to best suit your needs. Obviously, if you’re working in manufacturing, you’ll want space to install equipment and store your products. But the best option is to go with your gut: does the space feel right? Can you envision working here for several years? Is there room for expansion and growth? These factors don’t always make it on the commercial lease agreement terms, but you’ll know the right spot when you find it. After all, you know your business better than anyone else.
How to Deal with Your Existing Landlord
During your search process, you’ll want to consult your existing lease agreement: does it contain any language about assignments? What about subleasing? Either terms contained within your lease agreement may contain restrictions about your ability to lease your existing space early. However, if there’s no language about subleasing or assignments, you’re welcome to do either at your discretion – but this is rare. Landlords want to control the quality of the tenants occupying their space; others will flatly reject a tenant’s ability to assign or sublet a rented space. In some lease agreements, landlords will permit subleasing with their consent and approval. If you have a good existing relationship with your landlord and have found a subtenant that would suit their needs, you shouldn’t have a problem. Otherwise, you may be on the hook for early termination penalties should you vacate the property prematurely.
You’ll also need to provide your landlord with a written notice of your move (usually 30 days in advance and by certified mail). The notice should include the following:
- Today’s date
- Name of landlord
- Property address
- Notice of intent to vacate and at which date
- A forwarding address
- Signature of tenant
Your landlord will likely reply by mail or email and discuss next steps. Be aware that they’ll want to put the property on the market as soon as possible and begin showing the space to potential tenants.
Ensuring a Smooth Transition to a New Office Space
If you’ve never relocated to a new office before, you should know one thing: starting early is your easiest way to avoid headaches. Planning, searching, making decisions, and finally executing the plan could take over a year – and that’s generous for small-to-medium sized businesses.
The most important part of initiating an office move is to communicate clearly and honestly with your team. Not only will this move affect their workspace, it’ll impact their commute and daily routine, so the more notice you give, the more excited they’ll be about a shiny new office.
You’ll need help dealing with the nitty gritty details of the new space, so enlist some of the more excited employees to help manage seating arrangements, purchasing of new furniture, equipment, and decor, and to inventory existing possessions that may be obsolete or unneeded in the new space.
You’ll also want to ensure everything is packed, moved, and unpacked according to your needs once you get to the new office. Because continuity of business is key, having someone there to supervise the movers and ensure everything is setup correctly for day one will help avoid a painful first day. Getting necessary infrastructure like internet, phones, and cable connected before the move-in date goes without saying.
Lastly, looking back at the old space, hiring a professional cleaning service will help once you’ve cleared out your equipment and furniture. Any unneeded or unwanted furniture should be donated, recycled, or sold at warehouse auction – and you’ll need someone to help organize that, too.
Once you’ve settled in, completed your months-long journey and started a new one, don’t forget the small stuff: your employees will want to celebrate – and so should you.