25 Questions for the Office Tenant to Ask
If you asked me to use one word to generally describe what the corporate office tenant thinks about the commercial office space market today it would be; “confusing”.
We are just exiting the worst recession of recent history and those that are left standing in various states of economic health are faced with the decision of whether or not to take an offensive position to capitalize on market conditions in regards to their office facilities, or a “wait and see” attitude. If you read the press we get mixed signals as to the velocity of economic recovery and the state of the commercial office space market:
- Job growth returns, takes a pause and the threat of a double dip recession.
- Earnings are on the rise for many companies and many are sitting on a a ton of cash looking for the most strategic place to invest their capital.
- Office market fundamentals showing real improvement in select markets, bottoming out in some, and still deteriorating in others.
Less Margin for Error
Today there is less margin for error in a rapidly changing and increasingly complex real estate market. The most strategic course of action at this point will certainly vary depending on the specific organization and market conditions in the location of various space requirements. Corporate real estate is one of the largest components of a company’s infrastructure and can have a direct impact on operating margins and profitability and it’s often a significant factor for other strategic decisions.
25 Questions to Ask?
Today corporations are asking many of the following questions as they pertain to their office facilities:
- How can we minimize the cost of office space today and in the future?
- How big of an impact are occupancy costs on our bottom line?
- How much should office space cost in today’s market?
- What opportunities exist in today’s office market and how long will they last?
- What location(s) best suit are firm?
- How long of a lease should we sign?
- What is the optimum amount of space for our firm?
- What is the most efficient and productive layout for our operations?
- What should be the determining factors in renewing or relocating?
- What are the different negotiations in today’s market conditions?
- How we do we compare the true occupancy cost of various options?
- What is the best way to evaluate various Landlords?
- How do we incorporate flexibility into our lease agreement for both growth and contraction?
- How do we know when negotiations have reached an equitable end?
- Should we relocate, how much time do we need to orchestrate the entire process?
- How can we undertake a significant renovation of our existing space and stay in place?
- What does our office space say about our brand and corporate culture?
- Can our office space help us attract and retain employees?
- Should we address the sustainability issue and only consider LEED certified properties?
- Is ownership of a building or new construction a viable option?
- How do we control construction costs for the office build-out?
- We have multiple locations, how do we more efficiently manage our portfolio?
- How will the coming lease accounting changes impact our financial statements?
- What impact does new technology and changing demographics have on our office space?
- What outside consultants and from what disciplines should be involved to effectively manage and execute the most effective real estate transaction?
Except for larger corporations, many organizations don’t have a full fledged corporate real estate department. Regardless of whether you have a dedicated real estate staff or that responsibility falls to others in the C-Suite, the role of corporate real estate is more challenging than ever—and increasingly strategic. Having access to the resources to assist you in answering these questions, understand your office space needs and implement effective solutions will be the foundation for achieving the results that matter.