There is no doubt that once COVID-19 is behind us, many business owners will reevaluate their office space requirements. While some could require immediate tenant improvements to existing space, others may opt to downsize once their lease expires. If you’re thinking about downsizing or entering into a new lease during this time, here are some things to keep in mind. Remember having your tenant representative, and possibly a commercial real estate attorney, work with you through the process is always advised.
If you’re currently in a lease, think about your current space and how you see it changing once COVID-19 ends. Are you a business that can continue to have a portion of your staff work remotely and possibly come into the office for weekly meetings? How much do you value synergy in your office? Can your employees reach their goals without a manager or “parent figure” over them for motivation? The answer to these questions will be different for every business. It’s important to think about what’s right for yours and how your team will function best.
We should also recognize that this pandemic may bring along other widespread changes that could become the norm for offices of all kinds. The once popular collaborative workspaces could be a thing of the past due to social distancing preferences. Or perhaps we’ll see clear plastic shields like we’re seeing at the grocery store and Costco aimed at protecting the safety of both consumers and shoppers. While none of these things are for certain yet, it is important to keep all of these possibilities top of mind.
If you’re currently seeking commercial space, right now is a great time to negotiate a new lease or renew a lease, provided you have an a qualified tenant rep on your side. In today’s current market, many landlords are nervous their current tenants will go out of business or downsize leaving them with excessive vacancies. It’s a tenant’s market. As you start to think about what your ideal space could look like, your tenant rep can advise you on pertinent information such as which landlords are financially solid, which buildings have good property managers and how the latter two have treated their tenants through this crisis. Your tenant rep can also advise you on current market conditions such as rent abatement, lease rates, tenant improvements and other tenant incentives.
While it is difficult to predict what a post-COVID-19 workplace will look like right now, you can use this time to think about what kind of setup will work best for your business once this passes. Below are a few tips that may be useful:
-Hire an experienced tenant representation to guide you through the entire lease transaction – at NO cost to you so you can have your dream office without breaking the bank.Understand the balance between economics and location. A high-profile location is sexy and costly, yet not always necessary to conduct a successful business.
-Define your space requirements ahead of time. Poor utilization of space is where companies lose a lot of money. Often the landlord will pay for a space plan.Purchase an industry guidebook, like SimpLEASEity™, that guides you through the lease process, provides details to find the perfect location, explains how to negotiate a killer lease and put more money into your business instead of your landlord’s pocket.
-Everything in a lease is negotiable. Don’t settle for an ok deal.
-Always have agreed upon lease terms in writing! In disputes, the written lease rules.
It is too soon to know the outcome of the pandemic and how the country will fair. One thing is for sure. It’s never a bad idea to take control of your long-term interests and feel confident knowing your business is protected.
For more information about leasing and seizing the best market opportunity for your company, contact Andrea Davis.
About Andrea Davis
Andrea Davis, CCIM, has practiced commercial real estate for over twenty years. Davis’s breadth of knowledge stretches from developers to landlords to buyer/tenant representation and investments. Within the commercial real estate industry, Davis has won numerous awards. The Phoenix Business Journal ranked Andrea Davis CRE in the top 10 of Ranking Arizona for the category of Office Brokerage. Her book, SimpLEASEity™, focuses on leasing and is the first in a series of commercial real estate guidebooks. Her next book, Simply Own It, the American Dream, is forthcoming this year.