Whether in the middle of a global pandemic or short on time, having the ability to virtually visit a commercial real estate space without having to actually book an appointment is a convenience no matter the circumstances. Being able to visit a space without the time and commitment of an actual visit – let alone several during the course of a day or several weeks – is an immediate time-saver. Everyone’s time and attention are important, so brokers and listing agents should strive to provide an alternative to actually visiting a potential space. 

But there are some obvious differences and drawbacks between a virtual tour and actually visiting the space. Aside from being able to physically inspect certain details and ask the real estate agent questions during the walkthrough, it’s also possible that what’s displayed on the listing website isn’t 100% representative of how the space actually looks. In normal times, you shouldn’t rent any property – commercial or residential – sight unseen and leaving yourself exposed to bait-and-switch tactics and misleading photography or listing details. 

So, just as when preparing for an actual walkthrough, there’s wisdom in preparing your questions ahead of time and knowing what to ask during your virtual tour.

Questions to Ask During Your Virtual Tour

Besides the typical questions to ask during a property tour, the differences in a virtual tour should prompt more discussion. You’ll want to be prepared with a list of questions about the physical aspects of the space, any amenities you may require, and even details about the basics of each room. You can’t walk through and see locations for power outlets and network infrastructure, for example, so thinking ahead and imagining yourself during a physical tour will help you fill in the gaps during your virtual one.

You’ll also want to ask the realtor the following:

• -Is this space a model property, or the actual vacancy in question?
• -How recently have these photos and video tours been updated? 
• -How many workspaces have been previously used in the property?
• -Have previous tenants made any upgrades or changes to the property?
• -Are there photos of any damage I can inspect?
• -Will any tenant build out allowances cover improvements for social distancing requirements?
• -Does the building have a demonstrated history of companies utilizing distributed working conditions?

These are just a few examples, but with the unpredictable times in which we live, it’s critical that a modern office space can provide flexibility for companies that need to shift gears in a hurry. 

Important Differences to Consider Between Virtual and In-Person Tours

First, it’s important to distinguish between staged photography and the real thing. While you can’t be there to physically verify the authenticity of what’s presented to you, there are a few easy ways to telling between the real thing and what’s on your screen.

• -Be Wary of the Wide Angle: Despite the need for a “fish-eye” effect to film virtual reality tours and show every corner of a room, wide-angle lenses can misrepresent the actual size and scope of a space. When viewing the property from the comfort of your screen, be sure to get concrete details about the square footage and usable space of each room so you can make comparisons. 
• -Look for Disclosure: Any images that have been digitally altered or virtually staged should have a disclosure of that fact below. Asking the tour guide what specifically is edited will help you get a more realistic sense of how things actually look inside the property. 
• -Virtual Staging Tricks to Spot: Real estate professionals work meticulously to physically stage properties for expensive photo and video shoots, agonizing over the artwork, interior design, and even the color of items displayed in a photograph. Virtual staging is becoming more and more versatile, allowing realtors to change items on the fly. But being in a space makes it easier to assess the flow of a room and which objects should go where. If a couch looks like it’s in the wrong place or a table obstructs major walking paths, there’s a good chance the property has been virtually staged. 

Because realtors want to represent how a space “could” be compared to how it might be at the moment (that is, empty and without furniture, in most cases), it can actually be beneficial to ask for a few examples of layouts during your tour. If they don’t have them available, modern technology allows for quick adjustments, helping you imagine how your space could look once you move in.

Best Practices for Your Virtual Tour

• -Find a reputable broker. Especially because you can’t always face-to-face with a commercial real estate broker, it’s important to ask for referrals, references, and check credentials. What’s this broker’s history and experience in the market? How long have they been working in commercial real estate? Do they specialize in certain types of properties, or is this listing a bonus to their portfolio? These are all fair questions to ask.
• -Do your homework. Looking through public data on building history, contracts, and construction projects isn’t the most satisfying project on your to-do list, but investigating a potential space beforehand won’t just give you an idea of the space in question – it’ll arm you with more questions to ask during your virtual tour. And given the nature of the virtual tour, it’s important to keep records of written conversations if you decide to close on the property.
• -Be polite, but inquisitive. You may find yourself spending even more time during a virtual tour than a physical one simply because you’ll need to ask a lot more questions of the realtor than what you can see and inspect in person. It’s easy to feel that you’re using up a lot of the realtor’s time and forcing them to dig deeper on the details than they may be used to. But in our current reality, both parties need to do their homework and get as much information as possible before moving forward. 
• -Be prepared. Aside from your exhaustive list of questions, it wouldn’t be a bad time for a technology upgrade. Many property listings include an option for virtual reality tours. And while these don’t require a VR headset, the image will appear distorted without one. If you’re trying to make a substantial decision on how to invest in your company’s future, upgrading your hardware isn’t a bad idea. 
• -Research virtual staging and digital listing techniques. Technology is a wonderful, ever-changing thing. And while photoshopping images isn’t a new technique, it’s a powerful one. Getting a sense of what’s been incorporated into the virtual tour to improve the appearance of the property will help you get an informed perspective – albeit a remote one. 

It’s difficult to predict the future and how things will change during times of crisis. As you move forward with your office space search, it’s more important than ever to be prepared to ask more detailed, specific questions during a virtual tour to ensure you’re making an informed decision for your company’s future – no matter how that looks today.

Committing to a long-term agreement like a commercial lease is a potentially frightening proposition as a business owner – especially if you’re just getting started. But even more uncertain than the lengthy duration of a commercial lease agreement is the possibility that you may need to leave the agreement early. Whether it’s due to insolvency or (hopefully) the need to expand your team beyond the space’s capability, breaking a commercial lease agreement can be a complicated – and expensive – proposition for any company.

Depending on the wording in your commercial lease agreement, you may be on the hook for the remainder of the lease term as well as any applicable penalties and fees. 

Why Would a Company Need to Break a Commercial Lease Early?

Hopefully, the primary reason a company would need to break their commercial lease is to expand into a larger space in order to accommodate unexpected growth. The other (unfortunate) side of the coin is insolvency, bankruptcy, or closure of your business. While there’s wiggle room in between for unique circumstances, these two scenarios are the most common. 

How to Save Money Breaking a Commercial Lease

There are ways to save money on the remainder of your commercial real estate lease agreement. The most common is to locate a subletter, allowing another tenant to take custody of the property for the remainder of the lease under the same terms. However, that leaves you ultimately responsible for any damage to the property until the conclusion of the lease and typically need to be approved by the landlord.  

The potential for locating a subletter depends on market conditions, the landlord’s willingness to approve a subletter, and the wording in your original lease agreement. 

Depending on the language contained within the lease agreement, you may not have the option to sublease the space at all. More moderate terms are common, allowing tenants to sublet the space at the landlord’s approval and at their discretion. Others strictly prohibit any form of assignment or subleasing whatsoever, making the issue more difficult for those seeking to end their lease. 

As we’ve discussed in more depth and detail, subletting a commercial real estate space allows you to reassign the financial responsibilities associated with the lease until its conclusion, but typically leaves the original leasee (you) responsible for any damages to the property until the original term is complete. But, on the other hand, if you find a reputable subletter who will pay their rent on time, care for the space, and has the intent to sign a new lease when your original term is done, it can be a huge financial boon for your business – especially if you’re moving into a larger, presumably more expensive, space. 

How to Negotiate a Lease Agreement with Easier Termination Terms

Having a tenant representative broker on your side during the initial lease negotiation process will help you lay out any “must-haves” on your end of the bargain, helping you with early termination penalty clauses and options for buy-outs within a certain timeframe. Landlords, especially in down markets, will want to provide themselves enough time to make necessary repairs and list the property on the market before your exit, so having language in place for early exit notification and stipulations on penalties will typically be the best outcome you can get in this situation.

However, in places with booming commercial real estate markets, landlords may be willing to negotiate on an amendment to the lease agreement to leave early with more favorable terms. The bottom line: if the landlord can secure another tenant at higher monthly rates within the timeframe, you may be able to break your lease with minimal penalty. 

The other factor where a tenant rep broker would be an asset in negotiating for subletting or assignment, therefore allowing you (with the landlord’s approval) to pass along the remaining term of your lease to a third-party. In most cases, you’d be ultimately responsible for the original security deposit and their monthly rent, but would require them to pay you the monthly rent until the lease expires. It’s a more convoluted process than many landlords are willing to accept, but if you have leverage during the initial lease negotiation, you may be able to afford yourself this valuable early exit strategy should the need arise. 

How to Protect Yourself Against the Possibility of Breaking Your Lease Early

Aside from the aforementioned legalese and negotiations, businesses wishing to protect themselves against the possibility of terminating their lease early can do the following:

• Be realistic: Does your company need this much additional square footage? Will you reasonably grow at the same pace you expect from your business plan at the time of signing? Are market conditions moving in the right direction to invest in a long-term commercial lease agreement, or are you being overly optimistic? You need to ask yourself – and your team – these important questions before making such a substantial investment in a commercial real estate lease and lock yourself in for the duration. 
• Perform a third-party business audit: As a business owner, you’re constantly looking at the numbers. With a boost of success, it’s normal to feel validity in your achievement, but you can also get rose colored glasses. Before you make a substantial investment in a long-term commercial real estate lease agreement, consult with a business analyst or financial advisor to make sure you’re approaching this next step with the best data possible. 
• Find office space with room for growth – or retraction: While some spaces may not be glossy or glamorous, they could provide room for your company to expand or retract with an amendment to the lease agreement as needed. Making a moderate expansion in a new space is ideal, but if you’re uncertain about the future prospects of your company, then you should find a space that can accommodate a modular office concept should the need arise. 
• Be flexible with a smaller space: Even if you’re bursting at the seams at your existing space, moving to a slightly larger or otherwise more suitable facility on a shorter-term lease agreement could be beneficial as your company grows. While space for additional employees could be a struggle, alternative working solutions like rotating work-from-home days, remote workers, and a monthly rental for shared coworking spaces for your employees could mitigate these stresses and keep everyone productive. 

As with any business agreement, you’ll want to ensure all your bases are covered before you approach your landlord with a request to break your lease agreement early. Depending on your history, duration of tenancy, and market conditions, the property owner may be more willing to allow you to end your lease agreement earlier than anticipated. Be sure to give them plenty of time as a notice and consult with your tenant representative broker to ensure the process goes as smoothly as possible for both sides.

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.