Key Points To Consider When Moving or Expanding
Our team has represented and negotiated the expansion and transition for many companies in many markets. As we have concluded these transactions there are a handful of questions, comments, and actions that come up more than others. We would like to walk you through the Top 5 things to consider on new lease in commercial real estate.
1) Know Your Needs
The first hurdle is to completely know your requirements and this depends on the type of space you are moving into. For retail, know your location requirements for the markets you need to service. For office, its often helpful to create a heat-map of where your employees are driving from to get a best location on where to move to. How much space do you need? In a post-covid environment are those greater or less based on any operational changes? Covered parking? Loading docks? These are all things that should be contemplated early to determine the best space.
2) Operate on a Budget
Spaces are generally quoted on a per square foot basis... but that doesn't generally include all of the operating costs for the property. Knowing what you can spend does a few things (aside from it being just good advice to follow). One, it allows for realistic expectations to be set. Your Broker can then negotiate to your constraints better and know if a property can work or not. Another is that your representative can negotiate leverage points based on what you want vs what can be attained. Additionally, budget considerations need to include costs related to moving, technology, HR, and other expenses.
3) Be Available
When looking for space, and depending on the market you are in, spaces might come and go quickly. If there is a space that meets your needs and you can get a showing, it is best to move and make sure its something to negotiate towards. The rule of real estate is that once you are interested in something, someone else will be too! It just works out that way, so go.
4) Set Realistic Time Expectations
Frustration often boils over when desires aren't attainable... Be honest about how long the process will take. How long you will need to move equipment? How long will it take to have new equipment delivered? How long will it take to employ enough bodies to operate properly? These are all things that companies need to assess before the process begins. Having a better handle on these concepts keeps negotiations aligned and moving forward - generally landing on an anticipated and reasonable target date.
5) Make A Decision
The fifth, and final piece of advice from years of servicing clients and managing these transactions is to streamline the decision process and move through it. Time kills all deals. When a decision sits on a manager's desk for too long the next tenant will come along or the deal structure with the landlord changes; opportunities are lost. Many times, we will see a decision chain that is far too long for a transaction and value is lost. Be clear, all the way from start to signature.
The best way to pull value from a professional real estate company is to have your deal parameters clear and defined. The above 5 should help you on the way, and the best brokers will push to have these defined as they engage in the assignment. Call us to help with your next commercial / industrial requirement.
Cornwell Corporation is a commercial real estate services & private equity investment firm with offices in Doylestown, Pa & Scottsdale, Az. We leverage experience, capital, and technology to find value in commercial real estate and growth opportunities. For more information, please contact us at (480) 951-1212 or info@cornwell.co.
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