It seems that the relocation decision affects almost all aspects of operations and yet most companies have very few managers with experience in coordinating a company relocation and negotiating a commercial real estate lease. Nonetheless, every few years companies must either relocate or extend their existing lease and face landlords with far more experience with commercial real estate. This guide to leasing commercial real estate is designed to help level the playing the field for tenants by calling out common pitfalls to avoid, and processes to pursue that can help tenants make commercial real estate leasing decisions with confidence.
Involving C-Level and V-Level personnel during the site selection process is the best way to avoid the most common mistake companies make during the commercial real estate relocation process: trying to avoid disruption to business by not involving enough department heads. After making this mistake, companies typically have to scramble to build internal consensus before their lease ends. This causes the company to rush while forming their commercial real estate requirements which can lead to disruption and unmet expectations as often their new space will be suboptimal. To avoid this result, here is an ordered process to follow that has worked for most companies facing a company relocation or lease extension.
1. Make sure to take into account all aspects of your operation when considering a commercial real estate relocation. This means ensuring that all aspects of your business plan are supported by your new space. Considering that most commercial real estate leases are long in duration you need to take into account the future needs of your business. A common mistake business owners make is leasing space that is so small that the business has little room to grow. The opposite is also true; don’t lease too much commercial real estate based on unrealistic growth expectations. Another important aspect of a company relocation to consider is using it as an opportunity to improve your company’s image and to improve employee moral. Owners of start-ups often have the most difficult task as anticipating the business needs can be quite tough. However, taking the time to thoroughly think about your commercial real estate space requirement is key to finding the right space.
2. Define your exact space commercial real estate requirement early. Using a few sample available properties that meet most of your operational requirements (if possible), have your furniture dealer and other equipment vendors help you layout the space to your specifications. Many vendors will provide this service for free in hopes of obtaining your business later on. This will help to flush out the size of the space required now and into the future as you plan for headcount and other potential changes.
3. A competent commercial real estate broker should be part of your relocation plan. While there are many honest owners in the business, some aren’t and should be avoided; a solid broker rep can help you avoid those owners with a suspect reputation or building. Furthermore, landlords have far more experience with the process than you do, so it is best to have somebody with extensive knowledge representing you. The best part is you won’t have to pay you broker’s fees as landlords are happy to pay a fee to any broker that helps fill a vacancy. Brokers track all of the available commercial real estate in a market and will show you buildings that you didn’t know would work for you. They will help you save time, money and keep you on track. There are many reasons to use a broker and no reason to avoid using one.
The full Commercial Real Estate Leasing Guide is available by clicking here and contains the rest of these helpful pointers. Remember to follow our guide as well and your relocation experience will be infinitely better.
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