Tips for Moving into Your New Office Space

No matter what stress survey you view, moving is almost always listed as a top-10 trigger, with some surveys placing it just before divorce and after the death of a loved one…yikes. While moving for personal reasons is stressful to say the least, moving into a new office space isn’t any easier. Business moves are even more complex, requiring detailed negotiations, intense labor, extensive planning, and long-term preparation.

Here’s the good news: though moving into a new office space can be stressful, it doesn’t have to be. We help thousands of businesses lease office, industrial, and retail space each year, and have compiled a list of some helpful tips and tricks to make moving easy, and dare we say, stress-free. 

1. Use a tenant rep broker to find you and your company a new office space.

Instead of trying to search for a new office location yourself, consider utilizing the services of a tenant rep broker so that you can remain focused on growing your business. Qualified brokers know how to find the space you need – whether it be executive office space or flex space – and will use that knowledge as leverage when negotiating leases and subleases. Because of their experience, tenant rep brokers will recognize any red flags, saving you the hassle of trying to navigate potential issues down the road. Best of all, the cost to pay the tenant rep broker falls onto the landlord, not you.

2. Find a reputable moving company to ensure your items arrive intact and at a reasonable price.

Moving companies are notorious for high prices, changing terms, and not being careful when it comes to the handling of belongings. That’s why it is imperative to find a reputable moving company that will honor your agreement and take care of your assets. When choosing a mover, be sure that the price they provide is based on a comprehensive inventory list and your location. Ask for a price break down so that you can see how much it costs to move each individual item, as well as what the terms are for items you do not end up moving (some will still charge you – read the fine print)! Moving office furniture, computers, and file boxes can be an expensive undertaking, so be sure to compare multiple moving company prices before picking one to use.

3. Rent a top-rated, local self-storage unit to ensure your items remain secure.

With storage units located in cities across the country, self-storage facilities can provide your business with a temporary location to store items when your moving dates do not align. There are other uses for business storage units versus just storing items during an office space move. Note that self-storage units are also a cost-effective storage option for long term inventory, offering a less expensive alternative to renting more industrial or warehouse space. You can compare and reserve nearby self-storage units online for free, easily finding a unit that meets your needs and price point. As with moving companies, please be sure to compare storage prices of different locations prior to reserving a unit to ensure you get the best deal.

Though moving can be quite the hassle, there are many benefits to relocating your office as well. Besides finding and designing office suites that will improve your overall workflow, moving into a new office space provides you with the unique opportunity to clean up and clear out! Take this time to throw away any unused items, organize/archive files, and start fresh! It may be years before you have the chance to go through everything with such detail again.

American Psychologist Theodore Isaac Rubin once said, “Happiness does not come from doing easy work but from the afterglow of satisfaction that comes after the achievement of a difficult task that demanded our best.” When your move is complete, you will be proud of the work your company has achieved, and better yet, the success that is to come.

 

Head of Growth

In his 20 year real estate career, Thatcher has acquired and sold over $5 billion in commercial real estate assets encompassing all property types nationwide and developed technology solutions for commercial property owners and consumers.

How to Gain More Flexibility in Long-Term Commercial Real Estate Leases

For most businesses, agreeing to a long-term financial commitment is only positive if it means additional and sustained income. But a commercial real estate agreement is the opposite – a monthly expense that needs to be paid in order to keep the lights on. 

Spanning anywhere between 3-20 years, a commercial real estate lease agreement is a significant investment. While most leases include clauses for early termination (for a fee), it’s important that companies pursue the greatest amount of flexibility in a long-term real estate commitment to protect themselves from changing market and economic factors. 

Why Landlords Refuse Short-Term Lease Agreements

Despite the fact that most companies can’t accurately predict business cycles further than 2-5 years, property owners always seek a longer lease term in order to maximize the value of their real estate asset and secure a predictable cash flow. 

There’s also the financial burden of taking on a new tenant. Taking into account cleanup costs, architectural fees for new buildouts, and landlord improvements to make the space suitable for a new tenant, it doesn’t make financial sense to commit an upfront investment for a short-term tenant. 

Exploring the Different Options in the Lease Negotiation Phase

Established businesses with long-term projected growth and prosperity can benefit from longer lease terms, which tend to offer more agreeable monthly terms, additional perks, and more generous tenant improvement allowances. But there’s always a chance that things will change, which is why you’ll want to protect your company’s interests with the following conditions during the lease negotiation phase:

Right to Assignment and Sublets

In the event of a rapid expansion, merger, acquisition, or if the absolute perfect property comes onto the market midway through your lease agreement, having a right to assignment (in which the original tenant would assume responsibility for a sub tenant) or sublet (where the landlord assumes responsibility for a sub tenant) clause in your contract will allow you to sublet the property to another company without breaking the terms of your lease agreement. 

Renewals and Extensions

Renewals and rights to extensions built into your lease agreement allow you flexibility in retaining a space after the term of your lease expires. Due to the hefty costs of relocating, not to mention the logistical nightmares of moving offices and maintaining continuity of business, it makes more sense to provide yourself the ability to keep the same space. Even if the market demonstrates more favorable properties, your landlord is always seeking more attractive tenants with deeper pocketbooks. After all, if it isn’t broken, don’t fix it. 

Early Terminations and Contractions

Early termination options give tenants the ability to end their lease agreement after a certain point, but requires them to give the landlord written notice in advance of the termination date – usually between 6-12 months. But these termination clauses won’t come without a cost. Landlords will demand, at a minimum, a certain percentage of the remainder of the lease and for leasing commissions and tenant improvement allowances. 

Contraction clauses allow companies to downsize their square footage in advance of the conclusion of their lease agreement. This allows companies to pare down their occupancy in the event of layoffs, changing market conditions, or in preparation of moving a company to another more suitable location. 

Flexibility in Expansions

Every business hopes to grow and expand their operations. In the hopes that it happens, it’s important to anticipate a growing staff over the course of a long-term commercial lease agreement and avoid stacking desks atop one another. Building owners usually grant a certain version of an expansion option to tenants, which are commonly chosen from the following:

Right of First Offer

Including a “right of first offer” clause in your commercial lease agreement mandates that the landlord must present a newly available space or expansion to the tenant before putting it on the market to third-parties, allowing tenants the ability to expand their square footage under the same roof. 

First Right of Refusal

This clause requires landlords and building owners to provide the same deal made with a potential third-party tenant to the current tenant for equal space. Triggering this clause would preempt any third-party deal and allow the current tenant to expand into the space advertised for the same terms agreed upon by the landlord and the third-party. 

Fixed Expansion Options

Also known as hold options, these stipulate that a tenant has a predefined amount of time to exercise an option on an adjacent or neighboring space once it becomes available before the landlord places it on the market for third-party availability. 

Other Alternatives to Space-Related Issues

Thanks to the democratization of the workplace and the reach of connected business communication systems, companies have begun holding off on an expansion of office space in return for flexible working conditions, shifting employees to remote or work-from-home situations to avoid overcrowding and in order to save money on expansions. 

Temporary or shared office solutions have also been a major advantage for companies with space shortages. Monthly plans through shared office providers give companies the ability to remain in contact with their employees, give them adequate desk space, and even schedule meetings in these shared conference rooms. For companies with space requirements or looking ahead to a major expansion, these short-term alternatives can prove invaluable to businesses on the move. 

Negotiating for more flexibility in your lease agreement can be a major hurdle in the process, but protecting your company’s interests in the long-term makes the effort well worthwhile. When you sit down with the landlord’s representatives, try and incorporate some of the above options in order to limit your risks and protect your company against uncertain market conditions and unforeseeable economic circumstances. 

 

John is the VP of Sales at OfficeSpace.com where he leads broker relations and sales. Prior to being VP of Sales, he was the Regional  Director for the company. John has over 25 years of experience working in the commercial real estate industry. Before OfficeSpace.com, John was a commercial real estate broker for the Norman Company in Seattle, WA.