When a new client meets with a tenant representative broker, one of the most important pieces of the consultation is utilizing the client’s goals and aspirations as a “road map” to the right building. That map may cover different terrain in each tenant’s case, but there are 5 basic factors to consider that are universal in any move:
- Operational parameters: This is a question of the circumstances in which the client needs its business to operate, including issues like access to the premises, control of the heat and air conditioning systems, electrical capacity, etc.
- Headcount: The first step to finding the ideal space is conducting a headcount of current employees followed by projections for the next 3, 5 or 10 years. This information can then be used to estimate the square footage needed in the new space, taking into account private offices, conference rooms, kitchen/pantry, common areas, etc.
For example, if a business operates 24 hours a day, 7 days a week, its options are limited since not all buildings will provide services such as HVAC on a 24/7 basis. Prospective tenants with such requirements will most likely rule out buildings that have limited availability in favor of those which have more flexible hours and tenant-controlled heating and cooling systems.
- Anticipating Growth: In the case of a growing business, creating a strategy for expansion is determined by reviewing the lease expirations in each building under consideration and determining whether spaces will become available.
The ideal strategy is to have a guaranteed option for space becoming available in the future. This allows the business to lease additional space in the same building, but only if the need should arise. With this type of agreement, the tenant does not pay for the additional space unless it is needed.
The other, less optimal strategy, is to rent a larger space that accommodates your future growth. You can sublet the square footage that is not yet needed. Over the next 3-5 years, when the primary leaseholder needs to expand its business, it can simply not renew its subletters.
- Location: The best location is different for every business. All stakeholders in a company need to be considered in determining an “optimal” location. This includes executives, employees, suppliers and customers. For some companies being close to public transportation may be important while others require easy access to an Interstate Highway.
A downtown location is a must for one company while a suburban location is better for another. Location preference is highly specific to the business.
- Budget: It only makes sense to begin analyzing costs among buildings after the size (i.e., headcount), operational parameters, growth capacity and location needs are met. If your company cannot fit, operate or grow in a building, the price doesn’t matter.
Once the above criteria is met, then a detailed financial analysis of each property is performed and negotiations can commence. An experienced tenant rep broker can be sensitive to a variety of priorities and concerns a tenant may have, including cost.
As a tenant rep broker, my sense of purpose has always been to help my clients be happier and more productive in their new environments. Mohr Partners exclusively represents tenants in real estate transactions, which allows us to advocate for our clients’ interests to the forefront of every negotiation.
These are the basics, but what are your true aspirations?
At Mohr Partners we have a passion for finding the best deals for our clients. With word of mouth as our primary means of advertising, we literally live by the deals we make – and unless we make good deals for our clients, we won’t get their repeat business. That is how we earned our reputation, and that is why we are growing. To find out more, call (646) 312-6800 or email email@example.com
George E. Grace
Mohr Partners, Inc.
232 Madison Avenue
New York, NY 10016