How To Choose Office Space

By Jennifer Fletcher, 20 Jan 12:15

Office Space Lease... Before hunting for commercial property to lease (or sub-lease), it's essential to develop a checklist of elements vital to selecting the "right" office space for you and your business.

You need to determine all of the elements a location must have, inside and out, before beginning your search. This will not only save you time and energy - and prevent wasted effort - it will also help ensure success in finding a place that is truly appropriate to your needs.

To develop this checklist, you need to assess exactly what you need, would like to have if possible, and what you are able to afford. Keep in mind that not all your criteria may be available in a single space - you may be looking for a nonexistent ideal. Make sure to prioritize your checklist items so that the space you finally choose consists of the most important factors. Key factors include:

Space Considerations. Determining the overall amount and different kinds (or subsets) of space you'll need. For example, private offices range from 120-200 square feet, workstations 36-80 square feet, file areas 12 square feet, reception areas (with seating) 350 square feet and conference rooms (seating 10-12 people) 200-375 square feet.

If you are leasing a store, you may want to consider the size of your inventory, as well as the size of your displays and dressing rooms. No matter what business you are in, you'll probably also need storage and closet areas, a bathroom, maybe a fax-mailing room, or even a kitchen.
It's best to add up everything and come out with a rough square footage estimate along with a "laundry" list detailing the kinds of space you'll require both now and in the near future.

Affordability. Prices for commercial facilities are based on cost per square foot (the national "PSF" average in 1998 was $18.19 per square foot).

These costs vary widely, depending on a building's location/neighborhood, whether it is located in a metropolitan or less populated area (in 1998, New York City office space averaged $28.39 per square foot), its appearance inside and out, and property value.

The Building Owners and Manager's Association (BOMA) classifies buildings according to the alphabet. For example, a Class A building is typically a modern, attractive secure building in a desirable location. You may be able to acquire the kind of commercial space you can afford by compromising; i.e., securing leased space in a less desirable neighborhood but in a historically appealing older landmark building..

Additionally, many downtown urban areas now offer incentive programs providing substantial discounts
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When deciding if you can afford to lease a space, determine the total amount it will cost you to move in and to maintain your lease plus the amount of money it will take to renovate the space so that it will meet your needs. Is it affordable? If not, look for another space.

Required Ambience. Sometimes, a particular business requires a certain kind of ambience. For example, if you are a leading edge design firm, you need to be in an office space that promotes that image or in a space that you can design so that it promotes that concept.

This is where basic ingredients of the space you need must be analyzed. For example, these can include the amount of natural light, number of corner offices with views, the type and color of carpeting (unless you are willing to replace), what the building's foyer and exterior looks like, how well the building is maintained, whether interior walls or other architectural elements need to be torn down or put in, etc. Naturally, these variables - or lack thereof - will influence your overall cost.

Subletting. Because many landlords charge a hefty security deposit - especially to young companies who haven't yet proven themselves - sometimes it's far more cost-effective to sublet space.
A business owner can sublet in one of two ways: taking over part of an existing office (usually one or more private offices) and sharing facilities (like the reception area, kitchen, conference room, Xerox machine, bathroom, etc.) with another business. Sharing office space can provide many cost-saving advantages. It can also help in terms of business referrals, if it is logical for the other business to refer you.

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The other way a business owner can sub-lease is to sublet an entire space from a business that has moved to another floor or building (or out of the area entirely). Not only will you relieve yourself of the responsibility of a security deposit, but you may see a substantial difference in your rent.

If your lessor has moved but is still under contract for the space you want, they will be looking to cut the costs of paying rent for two locations. Use this to your advantage and haggle. However, keep in mind that subletting is rarely long-term.

Finally, office furnishings and key architectural elements are often included as part of a sub-lease, which can be another cost -saving benefit.

Essential "External" Elements. Every business requires certain external elements in terms of location in order to succeed. For example, does your storefront business depend on foot traffic? Do you need to be located near public transportation? Do you need to be able to provide ample parking? What kind of parking do you need for yourself and clients?

Is your clientele the type who will only be comfortable in a certain area of town? Is an alarm system or upstairs location a must-have? What about zoning and land use restrictions? Do you need a building that is already wired for computers and the Internet?

Sometimes, you can acquire elements from the exiting tenant who may want to sell existing network wiring, an alarm, phone system, furniture, or more.

Help! A commercial real estate broker can assist you in the hunt for the ideal location and property. They also often can give you the benefit of local knowledge; i.e., the quality of certain landlords and properties.

Besides sharing their own "scoops" on what's available, they can also help you navigate your way through your leasing agreement. Look for brokers who are affiliated with the Society of Industrial And Office Realtors (SIOR) and are Certified Commercial Investment Members (CCIM) as these designations help ensure that you are working with an educated and responsible professional.

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