How to Reduce the Expense of Office Space
All office tenants want the highest quality and most prestigious office location. After looking at various office locations it is not unusual for a prospective tenant to have sticker shock when they see the rental rates for the office space they like. It is still possible to get what you want but you need to know what techniques are used to decrease costs that result in lower office rental rates. You will increase your success when you select a team of professionals to help you with your office space search and lease negotiation prior to when you start your leasing process.
Six stratagies that effect your office lease expense:
Knowledge of these six factors and how to use them prior to a space search and during lease negotiations will help you save time and money. Each one of these strategies will have either a positive or a negative impact on your ability to reduce the expense of office space.
Six Ways To Reduce Your Office Lease Expense:
Term: The landlord will take certain expenses that they agree to and amortize them into the lease. Generally, they will have a set rental rate and anything above that number they will act as the lender to a tenant and finance the expenses over the term of the lease. So the longer the term the actual monthly expense may be reduced because the financing term is longer. In the long run, this will not save you money but in the short term, it reduces the monthly rental expense.
Location: Selection of the right location begins with a study of what your firm truly needs in an office location. You must consider amenities, employees, clients, and pricing. It is unreasonable to expect that an office building currently leasing at $45 per foot will lease to you at $25. Knowledge of the office market and its demographics will save an office tenant time, frustration and money.
Tenant Improvement: Every tenant has the desired floor plan that best meets the needs of their office. Sometimes office space is already built that is similar or very close to the desired design. Reduction of the landlord's construction expense can offset the tenant's rent. Generally, this is done with additional months of free rent given to the tenant. This negotiation takes skill and understanding of the landlord's goals and objectives.
Lease: The office lease is a complex document with more expenses than base rent. You must understand all the office leasing expenses associated with the lease. Additionally, during the lease negotiation, you must know about market concessions that are currently being offered by landlords and request them. If you don't ask you will not get these valuable concessions.
Planning: This strategy applies to office tenants that are renewing their lease. Two important points to consider. Time is your friend if you start your renewal process early. It is your worst enemy if you procrastinate. Secondly, even if you like your office you must go into the market and look for office space. The reason for this is to find additional options that strengthen your position in your lease renewal negotiation. Using a tenant representation office broker will help you achieve better results. They know how to position you into the best position for a lease renewal negotiation. Additionally they will give you detailed lease analysis of every proposal to help you make the best decision.
Design: The best way to reduce the expense of office space is to not use as much of it. I know this is obvious but many office tenants take more space than they need and they are paying for it over the next five years. Thinking through your design and making a good space plan can save a significant amount of money for an office tenant.
Build your office leasing team.
You Wouldn't make a sales presentation for your business until you formed a team to make the presentation. Then why would you look for real estate before you build your real estate team? Every successful office lease negotiation has a team of professionals assembled to help the tenant get the best possible office lease.
The Office Leasing Team:
These are a few basic strategies that can help reduce the expense of office space for a tenant. If you would like more information contact us. We offer tenant representation services in Dallas, Plano , Frisco and Richardson. If you would like to implement these ideas to their fullest extent we can help.