How do I compare different buildings and space?

First, it is important to make sure that you are comparing “apples” to “apples”. Useable/rentable space, building efficiencies, floor sizes and configuration, load factors, and tenant improvements allowances all vary from building to building. It is necessary to arrive at comparable costs per useable square foot. For example, one landlord may quote $20/sf as the value of his tenant improvement allowance while another may quote $10 per SF. The $20/sf may include $10/sf worth of ceiling, lighting and HVAC equipment, whereas the second landlord’s $10/sf allowance may be above and beyond these items.

Second, the location of each of the final buildings needs to be compared and evaluated in relation to your original criteria (employee parking, commuting needs, client accessibility, transportation, amenities, etc.)

Third, take a close look at building quality; the exterior materials; depth of bays from glass to core, distance between columns, ceiling height, doors, lighting, ceiling, lobby finish, etc. You may want to rank the quality of each building on a 10 point scale.

Fourth, in evaluating the economics, you must quantify all factors: rental escalations, the value of the tenant improvement package, any reduction in quoted rents, and over-standard improvement allowance. All must be accurately calculated in order to determine and compare occupancy cost.

How important are the current market conditions to the deal that we negotiate?

Very important. Market conditions – the supply of space in relation to demand – can fluctuate sharply over a relative brief period of time. Knowledge of current market conditions is vital to a negotiating strategy. Market conditions often vary from area to area in Boise.

Being aware of market conditions and each landlord’s motivation can dramatically influence your bargaining power and the lease economics.

Should I lease more space than I need to allow for future expansion?

Depending on the market conditions and the size of your requirement, it may make sense to consider leasing additional space. For example, a rapidly growing firm in a tight market may wish to lease extra space as an insurance policy. However you have to remember the old real estate adages: Real estate is an illiquid asset; it may prove difficult to sublease your expansion space on your terms and conditions. Options are to get, not to give; it is better to provide for additional space by means of an options or at least a first right of refusal. Security of tenure is paramount. Be sure you negotiate an option to renew your lease on your existing space for one, or preferably two 5-year renewal periods. Real estate is a “bundle of rights” and a guarantee of continuity of occupancy is important.

How do I go about selecting my team?

In addition to a lawyer to protect your legal interests and a space planner, you will want to select an expert Tenant Broker. Look for a Tenant Broker who not only understands your needs but also has an accurate knowledge of current market conditions and who has your interest at heart. Do not walk into a landlord’s office unrepresented. He/she is a professional in a specialized business. Tenant Realty Advisors will help you make a deal advantageous to your best interests.

How much time should I allow to move into my office?

Longer than you might think. Though the length of time may vary based on the size and complexity of your requirements, you should allow a minimum of 6 to 12 months from the time you start looking until you move into your new space.

First, check your existing lease to determine when you must notify your current landlord whether you intend to exercise your renewal option (assuming you have one), or will be vacating your space. Working backwards from this date you can compare your options well in advance. You may need to start the process up to one year prior to your lease expiration date.

How much space should I lease?

A professional space planner can help determine your growth and expansion needs. Rules of thumb can be helpful but are only general guidelines. For example, while 200 square feet per person may be average, law firms typically require more and insurance companies less space per person. Landlords often employ their own space planners. However, a Tenant Broker can help you to objectively evaluate your space needs.

How do I handle my current lease obligation?

You cannot assume that because your lease was negotiated several years ago and your current rent may be below today’s market, that your landlord will readily let you out of your current lease. The landlord may wait until he has a new tenant in hand to replace you before agreeing to release you from your current lease obligation.

If you have a sublease clause, it can be a valuable asset. However, these clauses can vary widely. Read it carefully and seek the advice of your commercial real estate broker and attorney to be sure of your rights.