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Tuesday, July 5, 2022

10 Critical Elements in Real Estate Search Process

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1. Determine your requirements. Draft a list of the pluses and minuses of your current space. Brainstorm with company executives and real estate professionals regarding the specific needs of your firm: number of offices, conference rooms, workstations, etc. Ask a professional to create a one-page lease summary of your current obligations to simplify this procedure.2. Evaluate your company’s future trajectory. Is your company growing or consolidating? What is the long-term outlook for your industry? You may wish to explore flexible arrangements with an option to expand or contract written into the lease language.3. Consider a renewal. Many tenants overlook an opportunity right under their nose. Your current landlord, who knows you pay your rent on time and act in a responsible manner, may be desperate to keep you. You can leverage his interest by asking for a few months of free rent, a lower rental rate or even requesting tenant improvement dollars to upgrade your office. Be sure to reset your base year for operating expenses and tax escalations.4. Analyze your employees’ commute and transportation needs. Personnel represent the life blood of any organization, and you may wish to create an employee map for senior management. The best office space with the latest amenities will become a death knell for your business if you lose talented staff because of long commutes or poor access to transportation hubs.5. Know the local and regional commercial real estate markets. A commercial real estate broker, with experience in area markets, can determine the validity of asking prices, amenities and infrastructure compared to other opportunities in the vicinity.6. Assemble a multi-faceted team to represent your interests (not your landlord’s). By keeping your square footage needs to a minimum, an architect can impact your expenses for years to come. A real estate lawyer, of course, can analyze the language in a lease offer to ensure it meets all verbal agreements with the landlord. A broker can manage the entire process and negotiations.7. Understand the landlord’s perspective prior to negotiations. Different landlords work under different priorities. A landlord with a portfolio of buildings, for example, will differ from a landlord with one building who is hoping to use the proceeds for retirement. Landlords with high vacancies often offer better deals and are more amenable to counteroffers. 8. Find suitable spaces for consideration. Of course, due diligence must be employed for all business decisions, but it represents a fundamental element in the real estate search process. Multiple tours of a market will help ensure you meet your company’s needs and obtain the best bottom-line result. 9. Talk to and evaluate tenants adjacent to your potential office. Building tenants offer invaluable information about operating conditions, the neighborhood, parking and the responsiveness of building management. Assess how you compare to other tenants in the building regarding your size, credit, name recognition or other unique requirements.10. Determine your financial budget and stay within it.A great deal for too much space can burden your company unnecessarily for years to come. An honest evaluation of your financial situation should impact the buildings you visit, the amenities you are seeking, and your final bottom-line offer during the negotiating process.The real estate search process can become complicated and involved but following the points above will facilitate this essential decision regarding your company’s future.

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