Getting the Most Value out of your Office Lease
I chose to use the format of the popular American Express commercials to emphasize the point of what office tenants want most out of their office lease, which is; “value”.
Whether you are a high end boutique law firm, Fortune 100 corporation or startup software company, there is no question that office tenants want their real estate costs to be as low as possible, but they don’t always want the least expensive building that requires least build-out. In today’s economic environment organizations are attempting to aggressively manage occupancy costs. The current state of market fundamentals is aiding tenants in their attempts to negotiate attractive leasing terms and concessions. However the objective to create value extends beyond more attractive leasing terms.
Space Utilization and Productivity
Many companies, both large and small, are examining in much closer detail their office space utilization. Technology and demographic shifts are changing how companies use their workspace. Employees increasingly work in other places than their dedicated office or cubicle. In today’s top performing companies, workers spend more time collaborating in team spaces, training rooms and informal conference areas. Today, many organizations are looking and finding new ways to do more with less, to not only save money but to also increase productivity.
The corporate space user is increasing their focus on sustainability as a means to reduce occupancy and operational costs as well as their commitment to be good stewards of the environment. In lease arrangements this means selecting LEED certified office buildings as well as building out and operating their office space with sustainability issues in mind.
Real Estate’s Strategic Role
No function defines a corporation’s character more than corporate real estate. Real estate is playing an increasing role in the strategic direction of the companies beyond the function of providing a place for employees to perform their jobs. The C-Suite is recognizing the increasing importance of real estate in the recruitment and retention of employees as well as the perception of its corporate brand.
At the end of the day, real estate is one of the largest line items in the cost structure of an organization. As tenant representatives, our clients still primarily want us to identify the optimal space options and negotiate the most favorable terms that can be obtained. However the best service providers manage the process, provide expertise and the resources that center around maximizing the value of the office space their clients choose to occupy.