5 Key Factors to Finding the Perfect Space for Your Business
When a company comes to us looking for the perfect space from which to operate and grow their business, we have 5 major factors that we take into account. These 5 key considerations can either greatly enhance or detract from the properties that we evaluate.
1. Architecture: Generally, well lit spaces are more sought after than dark spaces, but it all depends on the client’s type of business. Computer work areas are typically better in darker areas and medical offices prefer fewer windows, due to patient privacy concerns.
The shape of a space matters, as well. Long rectangular spaces with lots of windows are great for law firms because they maximize the number of private offices you can have – but for a more collaborative enterprise, a circular workspace is the theoretical ideal, so employees have direct sight of one another and do not have to walk as far to communicate directly.
2. Loss factor: This term describes the difference between what the landlord charges you in “rentable” square feet and what you actually get in “usable” square feet. Because rentable square feet is essentially a made-up number, it is different in each building and thus makes a real comparison of usable space challenging. We neutralize that effect by measuring the usable square footage of each property in consideration, and then compare spaces on an “apples to apples” basis.
If you are dealing with a large space for your business, the loss factor from one building to another can literally mean a difference of thousands of extra square feet and dollars to you.
3. Flexibility: There is always the question of whether the lease will allow for flexibility. Does it allow the tenant to:
- license space
- sublease space
- expand
- contract
One advantageous provision that we have negotiated for our non-profit clients is a provision that allows you to “give back” a certain percentage of space if funding dries up. This allows your organization to continue without being burdened by an expensive lease or excess space.
We find that flexibility is particularly important to tech companies because they often experience rapid growth and need to expand their space quickly to accommodate these changes. Having broad rights in the lease to sublet and license space allows them to “bank” space until it is needed.
4. Infrastructure: It is important that the building where your company leases space has the appropriate infrastructure to support the type of business you are running. For example, in New York City buildings constructed from the 1960’s and 1970’s tend to use central air conditioning with strict hours of operation (i.e. in the summer from 8am to 6pm.)
However, if you run a tech company and your employees often work until midnight, this schedule is obviously a poor fit. You may need a building in which you can either control your own air conditioning or contract in the lease to have the air conditioning run on a different schedule that supports your business.
Additionally, the building you choose needs to be properly maintained, and needed repairs must be made promptly and effectively. In our experience we have become familiar with which management companies have reputations for excellent and responsive maintenance and which have more dubious reputations. This has impacts on your operational efficiency and your bottom line.
5. Cost: It is our role to negotiate the best possible deal for our clients. While price is important, it only comes into play once all of the other major factors are met. Once several buildings are selected that meet the client’s physical needs, then the focus on costs becomes more critical. There are always dueling interests at stake – landlords want the highest possible rent for the longest possible guaranteed term and tenants want the lowest possible rent with the greatest flexibility.
Keep in mind when negotiating the terms of a lease, you need to make sure you actually get the deal that you intended. Oftentimes landlords agree to a term sheet, but when the prospective tenant gets the lease, it is quite different. We make sure our clients get exactly what they bargained for.
Are you looking for a new space but aren’t sure where to start?
Our Objective
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 george.grace@mohrpartners.com
George E. Grace
Mohr Partners, Inc.
232 Madison Avenue
New York, NY 10016
646-312-6800