How to Minimize the Cost of Office Space
Every office tenant wants the highest quality office space available that fits within their budget. In other words, they want the best value that fits within their total overhead cost structure. The ability to achieve this objective requires an understanding of what drives costs and how to effectively manage them. The probability of success will be increased by utilizing professional expertise throughout the leasing process.
There are three factors that impact the total cost of your office space:
- The Location you choose
- The Lease Structure and Negotiations
- The Layout of your Space
Understanding these factors and the close interplay among each is critical in getting the most value out of your office space. If a tenant fails in this regard it is typically because they did not properly address one of these factors.
Three Things You Must Address
Location: Requirement number one is to get into the marketplace and conduct a credible market search to identify viable and cost effective business locations, even if you consider it likely you will renew your lease. Location drives costs for both labor and rental costs and the Landlord strives to lease space at the maximum current market conditions will bear. These values can vary significantly among market areas or a particular building owners situation. Selecting the right location requires a comprehensive evaluation of the marketplace which may uncover hidden opportunities. A credible market search creates competition for your tenancy, which is beneficial for requirement number two.
Leasing: Requirement number two is to structure a transaction that compliments your objectives and negotiate favorable financial terms based on current market conditions. Great deals are not just simply found, but are structured with an effective negotiation strategy. In today’s market, Landlords are offering more flexible terms and aggressive concession packages to retain and attract tenants. Taking full advantage of market conditions and creating leverage in lease negotiations requires the proper timing and approach.
Layout: Requirement number three is to maintain cost control over the design and construction process. The efficiency of your office space and the cost to build it out is the third major contributor to your occupancy costs. Today, many companies are increasingly focusing on space utilization with the objective of doing more with less. Securing the proper volume of office space via efficient design, space standards and construction management can yield significant cost savings.
Who Do You Need on Your Team?
In order to make the best real estate decision you need three professionals or a team of professionals to identify, negotiate, design and build-out the office space that best serves your financial and operational objectives. They include:
- Broker / Tenant Rep
- Architect / Space Planner
- Construction Manager
In addition you will need legal counsel experienced in real estate to assist with the lease contract. Hiring a team of experienced professionals who work hand-in-hand will insure the best possible occupancy solution at the best value.
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