Monday, October 22, 2007

Letter 's' stands for simple steps in successful office space leasing

Letter 's' stands for simple steps in successful office space leasing
Houston Business Journal - by Thad Pittman

There are many variables involved in finding the right office space as well as negotiating and securing a lease. It's important to take the proper time and conduct the due diligence necessary to avoid potential leasing nightmares. Taking the extra time can help businesses save considerable money and energy.
While there isn't a simple way to find the perfect place to lease there are several considerations to keep in mind during the process -- and they all begin with the letter "s."
Search for the ideal office atmosphere for the business.
Evaluate how the business operates and keep that in mind while reviewing a lease and a location.
If the business is noisy, has a lot of foot traffic or even a large amount of employees, it may not be a good idea to lease in a more quiet conservative office suite. Think of the access to office space, parking and even the comfort of the company's neighbors. These are all important issues to keep in mind while seeking out office space. Also be cautious of provisions in the lease. They may directly apply to the firm's normal work environment.
Survey for a prime business location.
Survey all possible areas within any city or metropolitan area before narrowing in on any office space. Logistics should play a big role in determining where to lease office space. Many small to midsize companies conduct business from the same areas and should factor that in before signing a lease.
It doesn't make sense to lock into a lease in the Galleria area if most of your business is conducted in The Woodlands. This will save a considerable amount of time and money, especially in travel costs, by being area specific when looking for office space. Ease of building access and
parking for both employees and clients should also be key considerations.
Subleasing: Be careful.
Subleasing space can also be one option to successfully cut business costs; however, it can also result in disaster. As with every calculated gamble there are risks, so make sure there are firewalls in place to protect both the business and its owners.
Investigate the financial history of the sublessor. Its past financial hardships could lead to future problems. Ask for some form of security from the sublessor -- a letter of credit, for example. Keep in mind that if a sublessor files for bankruptcy, a sublease is at risk. A bankruptcy can hurt the sublessor's credit and ultimately affect its business.
Be sure that the sublease entered into with a sublessor are the same terms followed by the landlord/general manager.
Make sure the landlord approves and signs the sublease agreement.
Stay patient while negotiating the lease.
It's easy to be in a hurry to close the deal so that work can be started. However, it's important for those negotiating a lease to avoid letting drawn-out negotiations frustrate them into a bad deal. Sometimes this is just part of the process and will ultimately lead to a good conclusion. It's important to recognize this and move on to a better option. Remember, there is always a better deal; it just may require some looking.
Sign a lease that fits the company's business requirements.
Keep in mind the different variables of the business before signing any lease. It's important to account for business scalability. Signing a long-term lease can lock a company into a situation that its business may outgrow or under-use depending on the fluctuation in its respective markets. Most business owners are hesitant of locking into such a lease because of that reason.
Savvy business owners are cautious if they are not certain about their business future. Flexible short-term office options may be the best feasible consideration.
Seek a referral.
Even the most experienced business person can have difficulties when searching for the right office space. An easy and effective way to succeed in this process is to ask around. Seeking the advice of a well-respected friend, colleague or business associate who has already successfully found office space, will save considerable amounts of time and energy.

Get a broker who knows the market call Ed A. Ayres at 713 782-0260 or see ; www.houstonrealtyadvisors.com

THAD PITTMAN is president of Corporate Office Centers (www.corporateofficecenters.com), which operates four business centers in the greater Houston metropolitan area.