Perhaps the time has come to relocate your business into a new space. The concerns you have are mounting: the time required by the process, the time lost on your business, uncertainty about what you can afford and where you might have to move, among others. By following a few basic steps, you will save time, money, and headaches. Why not do a little preparation to ensure you find a great building and the best possible deal terms?
1. Choose the right real estate broker. By all means, hire a broker to represent you. Take the time to find a professional that has the expertise in your market and the product type you are searching for, as well as the temperament that suits how you like to do business. A good broker is going to know what the market rental rates are, while you might only know rates of the last deal you signed. Don’t give the landlord the advantage. Certainly you want someone who is well connected in the community and can get you quick access to properties available on the market, and even some that have not yet been advertised. You want someone who can provide good counsel and negotiate hard for you. If you share a sense of humor, that’s all the better.
2. Complete a thorough needs analysis with you broker to determine precisely what you are looking for. Consider how many full-time employees you have, the type of space required, the options for growth, the feel you want, how will you use the space, and your major “must haves.” Then look honestly at your budgetary parameters. The key is to make sure your expectations for the new space fall in line with the reality of your budget and the marketplace.
3. On larger or more complicated projects, you may want to assemble a leasing team before you begin to tour space. If the project may require an architect, contractor, or real estate attorney, it is best to have them lined up and at the ready so the search process can proceed quickly. The more they understand your needs before the project begins, the better they will be able to assist you in looking at properties and deals.
4. Once you’ve found property that you would like to pursue, request a formal proposal (also called letter of intent) from one or more building owners. The proposal should outline all the basic economic and business terms that will become the framework of the lease agreement. Be detailed with the proposal on such items as rent abatement, tenant improvement allowances, and building signage. When you have an agreement with the landlord on the basic terms of the deal, have everyone sign the proposal! The more specificity you have, the less likely there will be any confusion or misunderstanding when you begin drafting the lease agreement.
5.While you might believe you have found the perfect space, it’s always good to have a back-up option. Any number of factors can come between you and that perfect space, so make sure you pursue more than one property at a time. Should your first choice fall through, you will already be in conversation about the second, and you won’t have to start the search from scratch.
Finding and securing a new space that will truly serve your business can seem a long and daunting process. To set yourself up for a positive outcome, take the time to prepare!
Mike Porterfield (firstname.lastname@example.org) is President of Tartan Properties Commercial Real Estate Services, an independent commercial real estate brokerage and consulting firm based in Alexandria. Founded in 1973, this family business focuses on office, industrial, and flex properties in Northern Virginia.