In our industry today, finding a great deal is easy, but finding adequate office space within thousands of options available can be very difficult. If you’ve searched for commercial real estate, you know it can be a pain, but it is relatively simple once you’ve been through it once or twice. It’s a process, you have to thoroughly grit-and-grind to be successful in a leasing market that is currently starting to stabilize and rise. Once you’ve been through the trials and tribulations the reward can be great. Don’t worry, you may be asking, “Well how do we go about finding one office space in a sea of a thousand?” We will walk you through the process so at the end you’ll be professionals.
As entrepreneurs, we are all searching for the same outcome. To be our own boss and become very wealthy in doing so. It’s the American Dream. It’s very exciting for a business owner or entrepreneur to have their business boom and finally get the business out the garage. Remember that without struggle, there can be no reward.
When searching for office space you will need to determine a few things:
1) Determine your office space needs
2) Access to multiple listing services (there are about 5 regularly used MLS systems in Orange County)
3) Reviewing floor plans to save A LOT of time
4) Financials
5) Negotiate
1) Determining your needs: First and foremost you need to determine what you need. Many people make the mistake of looking for office space and they waste a lot of time looking at the wrong spaces. The things you need to know are the size of the space you need and the office layout. A good estimate for how much office space (not industrial) you need is about 1,000 square feet for every 4 employees you have. Then it is important to know what kind of office layout you need (i.e. How many private offices, conference rooms, open area for how many workstations, kitchen, break room, reception area, etc.) Eventually this will help make the office search process more successful.
2) Access to MLS: The second thing is the MLS (Multiple Listing Services) like LoopNet, CoStar, Smith Guide, etc. They give access to everything that is available. One problem I that some MLS’ have properties that the others don’t. Limiting the selection of properties in a selected area. A lot of these services are also restricted to commercial real estate professionals, so search for the ones that will actually give you access to the data.
3) Review floor plans: Office space searches can take A LONG time. Driving to a property can take 15-20 min, depending on location and each tour can take 5 or 20 minutes. Now multiply that times the 100’s of properties that are listed on a daily basis. You better get the review floor plans and make sure the property works for you, before getting out there. You could waste A LOT of your precious time.
4) Financials: Company financials are also very important and having them ready will help lubricate your office leasing experience. If you are interested in any space, the landlord will want to know that you are “able” to pay the rent, therefore they will usually ask for 2 years of corporate tax return. If you don’t have 2 years, you can probably use your personal financials and guaranty the lease. The landlord will also want you to complete a lease application and will want to run your credit.
5) Negotiate: Lastly, negotiating rental rates and terms are crucial to making a space work for you. For example, the Landlord may want you sign a 3 year lease, but you know you will outgrow the space within less than 2 years; well you better negotiate some options that will let you expand and not be “locked-in” in a small space. Now if you are not good negotiator, put someone in your company who is good at it, in charge. Or you can hire a good commercial real estate broker to conduct negotiations for you.
In conclusion, when finding office space, you have to be very wise with your time, because it can take a LONG time, and you have to able to prove to the landlord that you can pay the rent. Factoring “Time Management” in your set of skills can take you and your company miles past the competitors when searching for office space. Negotiation skill will also help you get the terms you want that will work for your business in the long run. We are always happy to help, so if you have any questions at all don’t hesitate to contact is with any questions. J
Andrew Bermudez
Vice President
Building Solutions Group of Lee & Associates Commercial Real Estate Services-Irvine, Inc.
Direct Line: 949.790.3159
abermudez@lee-associates.com
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