Your business is growing daily and suddenly the challenge is no longer paying the bills, but achieving your maximum productivity while your 8 new employees are spread out around your coworking space. This is a success and trial every company dreams of facing because it means it’s time for your first office space! Finding this office space can be a daunting task, so we at Alt + Co Launch have broken down the process for you.
Can you afford your first office? Would having your own office space be less expensive or create more efficiency and success than your current coworking setup? What most tenant reps won’t tell you is to wait until you absolutely NEED your own office space. We see most companies begin their property search with around 6-10 employees, but crunch the numbers, observe your company’s needs and decide that it’s absolutely necessary.
First thing you should know is that there are two types of brokers; landlord reps and tenant reps. If you go about this process alone you will most likely interact with a landlord rep, who will be negotiating on behalf of the landlord, not you. This is why it’s beneficial to hire a tenant rep. Tenant reps are free to their clients as they are paid by the landlord once the deal has closed. As you are busy spending all day, everyday growing your successful company, a tenant rep will learn your needs, identify available locations, schedule and lead your property tours then guide you through the lease or contract and negotiate on your behalf to make sure you get the best deal available!
The process of finding your first office space can take any length of time depending on the market and how challenging your criteria may be, but we typically recommend getting a 6-month head start. Next, we need to figure out what you need in a space. Location. Budget. Timing. Lease term. Parking requirements. Do you want to buy or lease? What type of building do you want to office in? These are a a few of the important factors that your tenant rep will discuss with you to help narrow down your search. Lean on their market knowledge to help guide your realistic expectations regarding price points and vacancies in your desired locations.
Once you think you’ve found your spot, there are a few questions to ask yourself. Does the landlord take good care of the other tenants and the building? Do your employees and customers feel comfortable here? Is there room to grow? Most importantly, are you going to be your most successful here?
We begin by submitting a Letter of Intent (LOI) to the landlord. This document will cover points such as rent, additional expenses, renewal options, signage, important dates, etc. Keep in mind that EVERYTHING can be negotiated!
There are many terms that people don’t think to ask for when signing a lease, such as free or partial rent, Tenant Improvement (TI) allowance, moving allowance and a Right of First Refusal (ROFR) which will allow you to take additional space as your company grows. These are concessions that the landlord will be familiar with and is often prepared for. It’s always worth the ask!
Once you receive the lease or contract we recommend having an attorney review the document and make the appropriate changes to best protect you and your business. After the document has been red-lined and agreed to by both parties, everyone signs and we celebrate! At this point, construction (if necessary) will begin on the space.
Don’t let the time consuming, tedious process of finding your first office space be overwhelming for you. With your new knowledge on real estate deal points and with the help of an educated broker, this is no longer a task to fear! Best of luck on your search for your perfect office space!