10 Tips to Follow when Searching for Office Space

Last month, I signed the lease to my new and beautiful downtown office. Throughout the search process, I had disappointments and I learned some things and just thought I'd share some perspective. Here are ten tips for you when searching for office space:

1. Get a commercial realtor. Regardless of how much you think you know, or your inability to let go, you need to get expert advice. The truth is, we're all experts at different things and should not try to dabble in everything. It's simply not cost-effective. A commercial realtor is free of charge to you, they have access to information that you will never be made privy to, they make a living negotiating office space deals, and they know all about the do's and don'ts of the industry. They can explain the difference in lease agreements (i.e. triple net lease vs. gross) They can help you decide whether to lease or buy. Plus, they make the process easier; you can concentrate on your business day-to-day affairs while they sweat out the details for you. Why not?
2. Know your customers. What does this have to do with anything? Well, if you know your customers and their buying patterns, you know the areas to avoid. Also, you know how to ensure that you have necessities like ample parking space, handicapped parking, centralized or suburban locations, access to freeways, etc.
3. Be realistic about what you can afford. I suggest looking at your business break-even number (this could be in the forms of units or dollar amount). How much more would you have to sell, plus pay this new rent, plus cover expenses and employees (fixed costs) plus those costs that may be variable (like the additional business drive every other month, etc)After analyzing, jot down a figure that you cannot exceed and stick to it. Hold your ground and don't bulge!
4. Get an attorney. You will want to preferably search for a real estate attorney; however most attorneys most likely understand leasing contracts. Don't be afraid to spend money to do this, some attorneys may only charge you a fee for a couple of hours to ensure that your commercial realtor has covered all the terms. An attorney could also add additional provisions to assist you that would not have otherwise been mentioned. Do your due diligence.
5. Don't be afraid to negotiate. Now if you have a commercial realtor and attorney like I suggest, you would leave the initial work up to those two. However, keep in mind our current economic state. Business experts everywhere are screaming "No new overhead expenses!!" So if your business is ready to expand, take a calculated risk and negotiate rent, length of lease, etc properly. With the current economy, landlords need you. Be sure that they "woo" you a little.
6. Make sure you understand "CAM" charges (Common Area Maintenance). For retail businesses, this feature proves to be especially important. You will want to understand fixed versus variable charges and how it will be applied to your final rent bill or yearly bill.
7. Negotiate utilities. Most tenants forget that utilities can pose a financial threat also. Depending on the business, your costs may skyrocket. Try to negotiate a lease with utilities included, this could help ease your burden and eliminate additional check writing.
8. Request changes or improvements. Don't be afraid to ask for what you want. If the carpet or walls are faded, ask that they be replaced, cleaned or painted. If your business requires a buildout (features added) have your realtor and attorney negotiate the pricing.
9. Compromise and expect compromise. Just because landlords are strapped, does not mean they will give away office space. On the other hand, if a landlord refuses to compromise, walk away. They don't want your business. No place is that great (you'll probably drive by in a year and still see it vacant anyway).
10. Visit the property alone. You may want to drive by during peak hours and after-hours. Observe the area, the parking and the customers from other businesses. Talk to current tenants if you can; they may give you some valuable information. Check the cleanliness of the building and parking lot (if it's during the winter, look for snow removal. If during the summer, look for landscaping activities or abuse).

Remember, no lease is ever "blanket" and like my realtor says, everything is "up for negotiation."

Stay tuned for my leasing mistakes and tips on leasing don'ts....

About the Author: Cheryl Isaac is the writer of this blog and the Startup Business Consultant & Owner of Isaac Business Services; an agency that offers startup concierge & business planning services for small businesses.