Tuesday, January 30, 2018

5 Reasons to Consider Renting Office Furniture vs Buying

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reasons to rent office furnitureOffice furniture is a necessary aspect for a business that leases offices space as it adds to the function and design of the overall layout. It also can be a very expensive part of it, which is why you need to thoroughly evaluate the different options and budget accordingly. Depending on the office furniture vendor that you use you may have the option to rent office furniture or buy it, however how do you know which option makes sense for your business? 

Below are 5 reasons why you might consider renting office furniture rather than buying it.

  1. If you are in a hurry and need it sooner than later – New office furniture often has long lead times. If you plan ahead then you have time to select, order, and receive it, however if you don’t have much time to wait then you may consider renting. Furniture rental companies can typically supply you with office furniture within 24 to 48 hours.
  2. When your company has unpredictable growth – Startups and new small businesses have a hard time projecting growth. What if you get a big sale you were not expecting and need to hire 50 more people? It can be difficult to account for that type of rapid hiring. Also if your business is seasonal or potentially volatile renting office furniture will allow you to deal with these fluctuating situations.
  3. You don’t have the cash – New business many times don’t have a ton of cash. If they do they may need to use that for business operations and sales growth. Buying furniture can tie up a lot of financial resources. Renting office furniture allows you to get what you want now, however without the upfront price.
  4. You have a short term lease or office sublease – Sometimes you may find an awesome office space that has a short term sublease remaining or maybe your a startup that is growing and prefers to sign a short term lease to remain flexible. Renting furniture in these situations make it easier to relocate. If you are planning on signing a lease or sublease that has less than 24 months then renting office furniture makes more business sense. 
  5. You change your brand or image often – If you are constantly changing or evolving your brand then renting furniture will give you the ability to try out different styles. Office furniture is like a car. After you buy it loses a certain percentage of its resale value. It depreciates faster than a car does also. If you want the most current up to date style then renting office furniture is your best option.

There you are! 5 reasons why renting office furniture might be better than buying office furniture. Most office rental companies make it easy to rent. You typically have a low up front deposit then you pay monthly rent costs. They will deliver and set up the furniture for you, and when you are ready to relocate they will tear it down and move. It’s a great alternative to buying and allows you to focus on your business. Just like how renting office furniture has its benefits renting Austin office space might be a better option than purchasing it. If you would like help in determining whether you should lease or buy office space give us a call at 512-861-0525

 

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Other Costs Associated with Renting Office Space

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other costs to consider leasing officeSometimes when companies begin estimating their office space needs they often overlook the other costs associated with the leasing office space. Your monthly rent will be the biggest expense you incur however there are other things to consider that you will have to pay for as well. By budgeting these costs now you will avoid any surprises and and frustration later on.

Below are a few other costs to consider when leasing office space.

  1. Parking – In most cases if you are leasing office space in the suburbs parking will be free. However if a building has covered parking or offers reserved parking then you may incur additional monthly fees if you opt for those options. Additionally most downtown areas are going to charge for parking. In Austin, Tx for example parking fees average $150 to $250 per month for EACH employee. The more employees you have the more monthly costs. At the end of the day it’s important that you know how office space parking works in your city.
  2. Furniture – Every business needs furniture. The question is do you want to rent or buy furniture? Do you want to buy used, refurbished, or new furniture. How many employees do you have now and in the future? Furniture can get really expensive so it’s important that you budget accurately.
  3. Phone & Data Cabling – Depending on your deal you may get a tenant improvement allowance. Sometimes landlords will let you use any left over TI allowance to pay for phone and data cabling. Other times they will not. Regardless you need to budget for this cost as if you are paying for it yourself. If you are leasing a 2nd generation space you may be able to use the cabling that was left. However new laws require tenants to remove their wiring before they move out. So…….make sure you get an estimate on the cost of phone and data cabling.
  4. Moving costs – Are you going to move yourself? Make sure to get quotes for the cost of moving your office to the new building.

If you have any questions about leasing office space in Austin Tx feel free to give us a call.

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How Much Does it Cost To Lease Office Space in Austin Tx?

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how much it costs to lease office space in Austin txWhen renting Austin office space you typically fall into one or two of the following categories:

  1. Your headquarters is out of town and you are considering opening a satellite office in Austin
  2. You are relocating your head quarters to Austin
  3. You currently do business in Austin and need to lease space for the first time
  4. You currently do business in Austin and want to relocate your office to a different building

Regardless of your current situation one of the first questions I get is “How much does it cost to lease office space in Austin, Tx?”

Austin Commercial real estate markets change. Sometimes you have a high vacancy rate and lower lease rates and sometimes vacancy rates are low which means lease rates are higher. When starting your Austin office space search it’s important that you spend the time necessary to learn the market or hire an Austin tenant representative with experience so you can arm yourself with the information, tools, & resources that will give you the leverage needed negotiate the best deal. 

To Determine The Cost To Lease Austin Office Space Learn About

If you click on the links above you will learn a ton of valuable information. In a nut shell there are several different types of leases that differ in what the landlord is responsible for payment of vs what the tenant is responsible for paying for. It’s important that you understand each one and how they will affect your monthly rent. The same goes for how the monthly office rent is calculated. Depending on the type of lease the calculations will vary. In addition the type of space has an impact on your monthly rental costs. Class A space is going to be the nicest and most expensive while class C office space will be the oldest and least expensive.

Read the posts I put together on each of those topics. After learning then when you look at the post with the average office space lease rates in Austin then it will all make more sense.

If you have any questions feel free to call 512-861-0525

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5 Things That Can Affect the Cost of Your Office Space Build Out

Friday, January 19, 2018

Austin Commercial Property | Real Estate | Buildings For Sale - Need Help Finding Commercial Property For Sale in Austin? Give us a call at (512) 861-0525

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Need Help Finding Commercial Property For Sale in Austin? Give us a call at (512) 861-0525

commercial real estate for sale austin txAre you searching for Austin commercial property listings for sale? If so let us help you. Just call us or email us and we can get started right away.

We specialize in helping buyers & investors search, select, and negotiate the purchase of commercial property listings in Austin, Tx. Because our fee is paid for by the property building owners (sellers) our services are free to you, however our fiduciary duty is to represent your best interests. Unlike other commercial real estate agents  we have no conflict of interest since we do not represent commercial property owners. We only represent your best interests and are able to provide unbiased opinions on every property and give you insider information that they are not allowed to since they represent the owners.

How to Find Commercial Real Estate For Sale in Austin, Tx

There are millions of square feet of commercial real estate for sale in and around Austin, Tx. You could spend a lot of time searching on your own driving around or searching the internet only to find outdated or inaccurate Austin commercial real estate listings. OR……..let us help you simplify the process. We will save you a ton of time, help you avoid costly mistakes, and negotiate the best deal possible. To help get you started read our guide on buying commercial property.

Then when you are ready

  1. Simply give us a call at (512) 861-0525 or fill out our Austin commercial real estate information form. 
  2. After learning about your ideal location, size, budget, timing, & investment criteria we will will identify all the listings that make sense.
  3. We will schedule tours with the best buildings and walk them with you giving you our unbiased opinions on each one.
  4. We will help you do an apples and apples analysis of each property and then draft and submit proposals on the best options.
  5. And finally we will help you negotiate the best price.

Types of Austin Commercial Buildings Available for Purchase

Whether you are looking to buy Austin office space, industrial property, or retail buildings we gotcha covered. We pay to have access to all the major commercial listing databases in Austin, have relationships with all the brokers in town, and keep a pulse on the market so we know what is available and when. We have been doing this for over 12 years so you will be in good hands. Give us a call (512) 861-0525 or fill out our website form and we will get started right away! 

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Thursday, January 18, 2018

Creating The Office Space of the Future

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office space of the future creationI just attended a Bisnow event where a panel of 5 commercial real estate professionals talked about the future of office space. The discussion evolved around a lot of the same trends we see occurring in the industry and office marketplace such office space designs to be collaborative, social, productive, amenity focused, etc. Below will give you the gist of what was discussed and insight into how industry professionals are talking and thinking about the future of creative office space.

The panel consisted of:

  • Scott Strzinek – Director of Global Facilities, National Instruments
  • Ashley Phillips – Managing Director, Impact Hub
  • Gary Rust – EVP, McCoy – Rockford
  • Justin Segal – President, Boxer Property
  • Lionel Felix – President, Felix Media Solutions, Inc
  • Sam Houston – Partner, HPI Real Estate Services

Overall the panel was all in agreement that companies (especially in Austin, Tx where  there is fierce competition for talent) must continue focus on office spaces designed to recruit and retain employees. Below are some of the key takeaways:

  • Multipurpose spaces are ideal
  • More useful space, less wasted space
  • Spaces that foster collaboration is a focus
  • Amenities are key to attracting employees and retaining existing ones (e.g. fitness centers, meeting rooms, game rooms, showers, food, etc.)
  • Office buildings need to be technology oriented to satisfy tech company needs. If they are not then they need to be upgraded.
  • Mobility – Ability to move around and work from anywhere
  • Spaces need to be designed around employee job functions and preferences
  • The need to have hoteling space for when tenants have visitors 
  • The need for a lot of meeting space
  • Building owners and tenants should focus on community as well as the bottom line
  • People don’t want to work in dads office of the past
  • Bring your own devices (BYOD) allows people to work from anywhere
  • Office space design is specific to each organization. Don’t assume every company wants open space
  • Emphasis on how people work individually as well as a team
  • Relationship between people and work has changed because of technology
  • Replacing the word “Tenant” with “Customer” 
  • Less about physical space and more about helping customers do things that they can’t otherwise do on their own
  • New spaces need a balance between open & closed
  • Landlords need to focus on using space as a tool to help tenants get things done, bring people together, make business introductions, get discounts, with legal matters, etc..
  • Another amenity for landlords to consider is having an onsite dr for tenants to use
  • Incorporating “PLAY” into spaces such as swings
  • The need to make “space” a destination
  • The idea that you don’t need space for every person. Incorporate more hoteling, shared space, etc.
  • Customers want space that is “EASY”. Everyone has to be able to use and enjoy it
  • Creating more value for tenants
  • Landlords to always be asking the question “what can we do for the customer (aka tenant)?
  • How coworking can be used as a tool for companies when expanding, waiting for a space to be built out, satellite offices, remote employees, etc.
  • Large companies leveraging coworking as an extension of their company
  • Flexibility is key. Business climates changing more rapidly
  • The culture is more social than ever and we have a more mobile society
  • Proximity to conveniences is important. Make it easier for company employees to run errands, go to the doctor, pick up the kids, eat, shop, workout
  • Business models must also evolve to make flexible space work
  • Space flexibility must be adopted and supported by organization leaders
  • With the talent crunch in Austin, Tx people are interviewing companies and their space amenities just as companies interview them
  • Employee skill sets and working habit should be considered when designing flexible space
  • Landlords hosting events and using sponsors to help cover the costs
  • Companies searching for office buildings that can accommodate denser users
  • The more dense the space the more landlords have to adapt to how they manage the buildings (e.g. mechanical, HVAC, trash issues, etc.)

If you would like to learn more about office space trends and what impact they will have on your business don’t hesitate to reach out to discuss. If you need help with your Austin office space search just fill out our form or call 512-861-0525

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Wednesday, January 17, 2018

Paul Archer thanks for following me on Twitter! https://t.co/s7jgvvhKkS


from Twitter https://twitter.com/AustinTenantAdv

Questions to Ask Landlords When Leasing Retail Space

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questions to ask landlords leasing retailAs you search for retail space you will find that landlords operate their retail shopping centers differently. Meaning they don’t all do the same thing. That is why it’s important to understand the nuances of how each landlord manages their retail center, what costs they are responsible for, what costs tenants responsible for, etc. To help get you started below are a few questions to ask landlords when leasing retail commercial real estate.

  1. Who owns the retail shopping center? – Are you dealing with a local individual owner, and institutional owner? I ask because you would not negotiate the same way with an individual owner as you would with an institutional one. You have to adjust your negotiation strategy.
  2. How long have they owned it? – The owner is either a holder or a flipper. If they are a holder they will want to keep it longer and increase the value. They may be more negotiable. If they are a flipper they may make some quick improvements, increase the value, increase the rents, and resell for a profit. New owners may not be as realistic with rents especially if they bought at a high price in a hot market. Long time owners maybe more realistic with market rates and be able to offer lower rates since their basis is lower.
  3. What are the actual operating expenses for the center for the last 3-5 years? – This will give you an idea of how well they have managed to keep the common area maintenance charges to a minimum. If you see a pattern of the operating expenses going up and up and up then you might want to look at other options. They don’t have any control over taxes however they should be doing a good job of keeping their common area maintenance (CAM) charges low.
  4. Who is the largest tenant (aka anchor tenant)? – The anchor tenant is typically the one who attracts the most traffic. If they leave how would that effect your business? You want to confirm that they are staying.
  5. Who were the last two tenants to move out? – Were they not happy with the landlord? Did they go out of business, Why did they move out?
  6. Which tenants just moved in? – Go talk to them and find out how their negotiating experience was with the landlord.
  7. What is the signage criteria? – Signage is expensive so make sure you understand what will be required so you can get an estimate of costs for your budget.

These are just a few of the questions you should ask landlords when renting retail space. If you have any questions or would like help searching for retail space in Austin, Tx feel free to give us a call at 512-861-0525

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Why Your Commercial Real Estate Lease Needs Assignment and Sublease Clauses

What are Common Area Maintenance Charges (CAM) in Commercial Retail Leases?

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common area maintenance charge retail leaseWhen renting commercial retail space IN ADDITION to paying pre-negotiated base rents Tenants are also responsible for paying their pro-rata share of triple net charges (NNN). Triple nets are the taxes, insurance, and common area maintenance charges that Landlord’s pass 100% of the costs to Tenants.

The common area maintenance (CAM) charge is one of the net fees charged to Tenants in a commercial retail triple net (NNN) lease mainly consists of the maintenance fees for work done on the retail property’s common area. Each tenant is only responsible for their prorata share which is the percentage of the tenants rented space vs the total square footage of the property.

Common Area Maintenance Charge Definition in Retail Lease Contracts

Below is an example of how you will typically see common area maintenance charges defined in a retail space commercial lease contract.

In addition to the rents and other charges prescribed in this Lease, Tenant shall pay Tenant’s proportionate share to Landlord all of the costs of operation and maintenance of the Common Area (“CAM”) which may be incurred by Landlord in its discretion. CAM shall include, without limitation, all sums expended in connection with: service and maintenance contracts, including, without limitation, windows and general cleaning, removing of snow, ice, debris and surface water, security police (if and to the extent Landlord provides security), electronic intrusion and fire control and telephone alert systems; machinery and equipment used in the operation of the Shopping Center; storm, sanitary and other drainage or detention systems, sprinklers and other fire protection systems, irrigation systems, and electrical, gas, water, telephone and other utility systems; off-site improvements (including off-site detention areas, drainage and detention ponds, landscaping and traffic signals), and the costs incurred by Landlord for maintenance and operation of and/or contributions to such costs maintained by others for any offsite improvements serving the Shopping Center; traffic regulation, directional signs and traffic consultants; permits, program services, and loudspeaker systems; paving, curbs, sidewalks, walkways, roadways, roofs, parking surfaces (including repaving, sealing, striping and patching); lighting facilities; signage; all costs and expenses allocable to any Declaration of Easements, Covenants, Conditions and Restrictions filed against the Shopping Center as amended from time to time (the “ECR”); margin taxes; the cost of compliance with any accessibility statute including, without limitation, the Americans With Disabilities Act and the (State) Accessibility Standards); all costs and expenses of water or other common utilities; uniforms, supplies and materials used in connection with the operation and maintenance of the Shopping Center; advertising, seasonal decorations, whatever management fee Landlord pays to the manager of the Shopping Center, CAM fees, an administrative fee equal to fifteen percent (15%) of CAM, and a reasonable allowance for Landlord’s overhead costs and the cost of any insurance for which Landlord is not reimbursed pursuant to Section 6.2, but specifically excluding all expenses paid or reimbursed pursuant to Article VI. In addition, although the roof(s) of the building(s) in the Shopping Center are not literally part of the Common Area, Landlord and Tenant agree that roof maintenance, repair and replacement shall be included as a common area maintenance item to the extent not specifically allocated to Tenant under this Lease nor to another tenant pursuant to its lease. With regard to capital expenditures (i) the original investment in capital improvements, i.e., upon the initial construction of the Shopping Center, shall not be included and (ii) improvements and replacements, to the extent capitalized on Landlord’s records, shall be included only to the extent of a commercially reasonable depreciation or amortization (including interest accruals commensurate with Landlord’s interest costs). The proportionate share to be paid by Tenant of CAM shall be computed on the ratio that the total floor area (all of which is deemed “leaseable”) of the Demised Premises bears to the total leaseable floor area of all constructed buildings within the Shopping Center (excluding, however, areas owned or maintained by a party or parties other than Landlord); provided that in no event shall Tenant’s monthly payment of CAM be less than the amount specified in Section 1.1(o) above. If this Lease should commence on a date other than the first day of a calendar year or terminate on a date other than the last day of a calendar year, Tenant’s reimbursement obligations under this Section 7.4 shall be prorated based upon Landlord’s expenses for the entire calendar year. Each month during the term of this Lease, at the same time and in the same manner as with the monthly installments of Minimum Guaranteed Rental, Tenant shall pay to Landlord one twelfth (1/12) of the estimated CAM for the current year which Landlord may have given Tenant for the current year or, if the CAM has not been estimated by Landlord, then Tenant shall pay one twelfth (1/12) of the actual CAM for the immediately preceding calendar year. Each CAM payment shall be due and payable at the same time and in the same manner as the payment of Minimum Guaranteed Rental. The amount of Tenant’s proportionate share of the initial CAM shall be as set forth in Article I above. Landlord may at its option make monthly or other periodic changes based upon the estimated annual CAM, payable in advance, but subject to adjustment after the end of the year on the basis of the actual cost for such year, as set forth in Article VI above as to payments of taxes, real estate charges, and insurance.

If you have any questions about common area maintenance charges when leasing retail commercial real estate give us a call and we will help get you up to speed.

The post What are Common Area Maintenance Charges (CAM) in Commercial Retail Leases? appeared first on Austin Tenant Advisors.

Monday, January 15, 2018

Ways to Make a Commercial Lease More Flexible for Your Business

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make commercial lease more flexibleWhen leasing commercial real estate having a more flexible lease will allow you to ensure the the building you lease space from will accommodate your current and future needs. Flexibility is key especially if you have a company with unpredictable growth. Below are a few ways to make a commercial lease more flexible for your business.

  1. Do a Shorter Term Lease – longer leases commit you to one particular space for 3-5 years or longer. What if you are a new business that is just getting started? What if you plan on hiring 20 more employees by the 12th month? If you are in a longer lease and the building does not have anymore available space you will be forced to lease additional space in another building or have to sublease your space or end up eating it for the remainder of the term. If you are able to negotiate a shorter lease (1-3 years) then you will have the ability to ensure that your business is going the way you want it to before committing to a longer term. 
  2. Negotiate a Lease Termination Option – Landlords don’t like giving these options however if you can get away with it then do so, especially if your only option is to sign a longer lease. You never know how quickly your company will grow or whether or not your business is going to make it. Let’s say you have to sign a 5 year lease to get the tenant improvement allowance needed to build out the space. If you can negotiate to have the option to terminate the lease after the 3rd year for example then you will have a little bit of flexibility. The caveat however is that you will more than likely have to pay some sort of early termination fee, which more than likely will be the landlords unamortized cost of tenant improvements & lease commissions as well as a predetermined number of rental payments.
  3. Get a Renegotiation Clause – This one may be tough to get however if you can get the landlord to agree to give you the chance to renegotiate aspects of your lease (e.g. rental rate, tenant improvement allowance, etc) at some point in time this will help you to make the lease more flexible.  Just keep in mind you might have to trade more term.
  4. Sublease & Assignment Options – Make sure you negotiate to have the ability to sublease all or a portion of your space to a 3rd party. What if you outgrow the space before the lease expires? What if you go out of business? What if you don’t need to use all of the space and wish to sublease a portion of it? What if you sell the company? These are reasons why you want to ensure you get sublease and assignment options.
  5. Expansion Options – This will give you the ability to take more space if needed. This may come in the form of a right of first offer (ROFO) or a right of first refusal (ROFR). With a ROFO the landlord must offer any newly available space to you before marketing it to others. A ROFR means the landlord has to offer you the deal that was agreed to with a 3rd party. 
  6. Contraction Options – Opposite of the above. At any point in time if you need to downsize with this option you would be able to give back a portion of your space. Keep in mind this is a deal point that only large companies have leverage enough to negotiate, especially if they are leasing more than one floor of a building.

The above are a few ways make a commercial real estate lease more flexible for your company. Just remember you will have to know how to negotiate these items. Having a commercial real estate tenant representative help you can increase your chances of success and their service does not cost you anything.

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Why Do Landlords Prefer Longer Commercial Leases?

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why landlords want longer commercial leasesWhen leasing commercial real estate you will find that most landlords prefer longer commercial leases. If you are an existing, financially sound company that has been in business for over 5 years signing a longer commercial lease is not a big deal. However if you are a new business or startup company predicting the success of your company beyond 2-3 years can be quite challenging. Below are a few reasons why landlords prefer longer commercial leases.

  1. They want stable predictable cash flow – In order to maximize their assets and satisfy investors and banks landlords want to have predictable cash flow. Having a bunch of tenants with 1-2 year leases does not guarantee a return on investment in the long run. Having tenants sign a minimum of 3-5 years will provide more security and predictable income for their asset.
  2. The need to recoup a lot of up front costs – In most commercial lease deals to persuade tenants to lease space at their building landlords have to spend a lot of money up front. The capital they typically invest upfront may be architectural costs, attorney fees, tenant improvements, and commercial leasing commissions. Depending on the scope of work completed they may not make any profit the first 1-2 years or longer which is why they would want a 5 year lease or longer to recoup their initial costs and make a profit so get an acceptable ROI.
  3. The market is hot – If the market you live in is strong, rents are at an all time high, and vacancy rates are low then landlords would want to lock in tenant at the higher rates. Markets are cyclical meaning rates won’t always continue to go up. At least every 8-10 years the market goes up or down. If they can lock you in at the higher rates for 5-7 years or more then it protects their investment during the downturn. 
  4. Retail space – If you are renting retail space then most landlords will want at least a 3-5 year lease. One is for the reasons above. The other reason is because of perception. If customers see tenants moving in and out every 1-2 years it makes the shopping center look like it’s not successful. Having tenants at a shopping center not only gives the center a better image but also gives the other tenants more confidence in the success and encourages them to stay there longer. All the tenants attract customers and that helps the shopping center as a whole.

Now that you know why landlords prefer tenants to sign longer commercial real estate leases you have to decided what is best for your business. Don’t force yourself to sign a longer lease than necessary especially if it does not make business sense. I know you may really like one particular building that requires a 5 year lease, however if you are unsure about the future of your business then you will be setting yourself up for failure by signing a long lease. If the landlord will not budge on the required lease term then find a building that will be more flexible.

 

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Sunday, January 14, 2018

Questions to Ask Landlords Before Signing a Commercial Lease

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questions to ask landlords before signing commercial leaseWhen determining which commercial space is right for your business there are a lot more things to consider than just the rental rate. Landlords know that most tenants are not familiar with the intricacies of commercial leasing and if you don’t take the time to ask the right questions you could be taken advantage of. Keep in mind the landlords goal is to negotiate the most money out of the deal as they can. The more money they make the better their return on investment. As a tenant you want to negotiate the lowest out of pocket expense and lease terms that give you as much control as possible. To help get you started below are a few questions you need to ask in order to negotiate the best deal possible.

  1. What Type of Commercial Lease is Being Used? – It’s important that you understand the type of lease being used and what obligations you will have after signing it. There are several different types of commercial real estate leases that landlords use and it depends on the market you are in, the type of space being rented, or just the building owners preference. Commercial lease types used could be gross leases, modified gross, triple net (NNN) leases, full service leases, etc. For example when renting office space you will see some landlords use gross leases however many are converting to NNN leases because it’s easier to pass through all the expenses to tenants. Again, before signing a commercial lease find out what type of lease is being used and what your obligations are.
  2. Are the Commercial Lease Terms Negotiable? – Pretty much all commercial leases are landlord friendly. Find out how negotiable the landlord will be when negotiating the lease. If you find out they are not give on anything it may be a sign on how not favorable they will be in the future. It’s really important that you know your current and future needs of your business and what lease terms are or will be important to you. Stick to your guns. If the landlord is not willing to give on anything then find a landlord that will work with you
  3. Is the Landlord Willing to Do Any Tenant Improvements? – 99% of the spaces you see will need some sort of improvements to accommodate you needs. I have not seen too many spaces that are move in ready. Ask the landlord if they are willing to make any improvements and/or if they will let you make improvements on your own.
  4. What Internet Vendors Service the Building? – The last thing you want to do is sign a lease then find out the internet service providers cannot accommodate you needs. Do you need fiber or gigabit? Which internet vendors service the building? What if you use AT&T in one location and it’s important that your next location also offers AT&T, however they only have Grande? What if your a gaming company that has to have fiber and you find out the building your in does not have it? Bottom line you need to ask the landlord which vendors service the building. What you will find is that most agents don’t know so you will have to do your own due diligence.
  5. How is the Phone Reception in the Building? – Another thing tenants find out after it’s too late is that the mobile phone reception in the building is not great. For example their company may use AT&T wireless and then find out that the reception is so low they have to walk outside to make phone calls. Sometimes having a cell booster installed on the rooftop will enhance the connection. Make sure to ask the landlord if they will allow you to have one installed. Or better yet ask if they will install it on their dime.
  6. What Amenities are Available? – Does the building have a building conference room, fitness center, deli, covered parking or other amenities that are free for Tenants to use? If they are not free how much do they cost?
  7. Are You Allowed to Assign or Sublease the Lease? – Fact is not every business is successful. What if your business fails or you grow so rapidly that your space won’t accommodate your needs anymore and your building does not have anymore vacant space? What if you sell the business? Will the landlord allow you to assign or sublease the space? If you sell the business and assign the space will the landlord let you off the hook or will you always be held accountable for the lease even if you sold the business?

 

 

 

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Saturday, January 13, 2018

How to Gain Leverage in Commercial Lease Negotiations

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gain leverage commercial lease negotiationsMost companies and small business owners that negotiate commercial leases on their own do so at a huge disadvantage. For one since they typically only sign a lease once every 3-5 years they don’t have as much transaction experience as an experienced commercial real estate agent that negotiates commercial leases for a living. I’ve been doing this for over 12 years and been involved in over 400 commercial lease negotiations. Because of that I often find myself in similar situations and know exactly how to negotiate them, however I also learn a better or different way to negotiate in certain situations every time.

Another reason “do-it-your-selfers” are at a disadvantage in commercial lease negotiations is because of their lack of market knowledge. Commercial real estate markets change every year. Building owners change. Tenant markets turn into landlord markets, Listing agents change. A full time commercial agent keeps up with market trends and transactions. They keep up with new building owners and learn their investment strategies which is key to knowing how to negotiate with them.

All that being said knowledge is key to knowing how to get leverage in commercial lease negotiations. If you insist on negotiating on your own I want to make sure you are prepared so below are a few ways for you to get leverage in your next commercial lease negotiation.

  1. Start the Process Early – If you wait until 30 days before your lease expires then the landlord knows you don’t have time to consider any other options. Depending on your market and size space start the negotiation process at least 4-12 months before you need space or before your lease expires. You may feel like you are starting the process too soon however if you want leverage you need time to negotiate. Landlords will try to drag things out if they don’t to concede to something. With time on your side you have more leverage.
  2. Get To Know Who Your Negotiating With – Are you negotiating with the landlord listing agent, the building owner, asset manager, or all the above? Find out who they are and what their experience is. Find some common ground with them. Check LinkedIn to find out their background. Find out what they are proud of or what they have accomplished and compliment them. Feeding their ego is a great source of inspiration for them to give concessions. It may make them feel magnanimous. Search the internet for their profiles and other info.
  3. Find Out Their Position on Things – Ask a lot of open ended questions to identify their wants or needs. Why are they asking for certain things? Why won’t they agree to your request? Get to know their bottom line by asking about their investment strategy. Are they looking to sell the building or are they a long hold investor?
  4. Be Silent When Necessary – Silence can make people uncomfortable to the point of jumping in and offering the concessions we asked for.
  5. Leave Emotions At Home – Good business decisions are made based on facts & data, and what makes current and future sense for your company. When you get too emotionally attached to a space and the landlord knows this you will knot have leverage. Deals fall through all the time so don’t get upset if the landlord changes their mind about something or the deal falls through.
  6. Have 2-3 Options on the Table – Negotiating multiple commercial real estate spaces for lease at the same time creates a competitive environment between landlords. Why would a landlord grant you optimal concessions if they know you are not considering any other options? In a hot market landlords are going to give the space to the first company that signs the lease so have a 2nd or 3rd option to fall back on. If the landlord knows you are seriously considering other options besides theirs you will have more leverage.
  7. Be Willing to Walk Away – To have leverage the landlord must know you are serious about walking away. If you say it but don’t do it then you lose leverage with the landlord. Again this ties back to getting too emotionally attached. You have to believe that what you are doing it right so make sure your opponent knows that you are not bluffing.
  8. Play Up the Potential Future Success of Your Company – Tell them your business plans and how you plan on growing rapidly over the next few years. If they think there is a chance that you could turn into a big long term tenant then you will have more leverage.
  9. Create a Business Case For Your Requests – Don’t just ask for 2 months of free rent because you heard another tenant got it. Have a business reason why you are asking for that concession and stick to it. Create a business case around it. You could also say that the other building you are considering is offering xxxxx which is why you are leaning that direction unless this building can match or do better.
  10. Maintain Control – No matter how the opposing negotiator acts you must maintain composure, anger, your environment, etc.
  11. Seek Perspective – When trying to gain leverage consider each persons perspective of why you’re negotiating and what each seeks from it.
  12. Alter the Other Persons Wants or Needs – Introduce future opportunities about your business. Allude to the possibility of your company growing larger, taking more space, and doing a longer lease term.

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Friday, January 5, 2018

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Why You Should Conduct a Yearly Commercial Lease Review

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annual commercial lease reviewEvery year companies do performance reviews, budgeting reviews, sales plans, etc, however I’ve never heard of one doing an annual review of their commercial lease. Your commercial lease is one of your biggest financial and contractual obligations and it should not be overlooked or forgotten. Depending on your current size and future plans there are certain leases clauses that may have been pre-negotiated and if overlooked or any important dates are missed you could put your company in jeopardy.

After signing a commercial lease most tenants simply file away the contract and never look at them again. Then later on when something comes up they can never find the lease. Ideally you want to store the lease in a secure file that will be easy to find later. And every year you want to do a thorough review of your commercial lease so you don’t forget important dates, deadlines, terms, & conditions.

Annual Commercial Lease Review Considerations

  • Make sure you know your commercial lease expiration date. If not clear ask the landlord what expiration date they have on file and make note of that 
  • If you have a renewal option know how many months notice you must give and be sure to not miss that timeline. Typically tenants must give 6-12 months notice of their intent to renew.
  • If you plan on relocating you want to make sure you give yourself plenty of time to find a new space and build it out before your existing leases expires
  • Do you currently have enough space to meet your needs?
  • What options do you have if you need to expand or downsize?
  • What are landlord currently quoting for comparable commercial space as the one you occupy?
  • If you have a ROFO or ROFR what are the terms and have you been offered them in the last year?

At the end of the day it’s important that you have read your commercial lease contract and fully understand all the important dates, deadlines, terms, and conditions. Missing one or more of these could potentially disrupt your business. To be more proactive dig up your commercial lease each year and review it from top to bottom to make sure you have not missed any important details.

If you have any questions about your existing lease or need to find and rent Austin office space feel free to contact us at 512-861-0525

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Tuesday, January 2, 2018

The Overlook at Barton Creek Office Space | 317 Grace Lane Austin Tx 78746

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The Overlook Barton Creek Austin TxThe Overlook at Barton Creek is a new class A office building located in Southwest Austin at 317 Grace Lane Austin Tx 78746. It’s located off of Bee Cave Road near the entrance of Barton Creek and has sweeping hill country views from every floor. 

If you are interested in starting your office space search at The Overlook at Barton Creek or other areas nearby call 512-861-0525 for help. We can help you find the right space within your ideal size, layout, and budget.

Building Size – 60,168 RSF

Building Height – 2 floors

Typical Floor Plate – 2,500 to 27,000 rsf

Parking – 3.5 per 1,000 sf structured / covered parking

Amenities – Common area fitness center, showers, and bicycle parking. Nearby tons of retail and restaurants

Transportation – Near one of the most affluent and beautiful areas in Austin equidistant to Hwy 71, RR 620, and Capital of Texas Hwy (Loop 360). 10 minutes from the Hill Country Galleria and Westlake.

For information about this Austin office building or others in SW Austin feel free to contact us. We can help you search for and find the best southwest Austin office space that is within your ideal size, layout, and budget.

overlook at barton creek austin texas

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When Should Startups Look for Office Space?

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startup office space searchMost startup founders get pumped when launching a new business however searching for office space may not be at the top of their list of exciting things to do. Unfortunately renting office space is necessary if your startup wants to grow and hire new employees. There are many things to consider when leasing startup office space such as size, location, amenities, employee needs, timing, etc. however the FIRST question is when should the founder of a new startup company start looking for office space to rent? The simple answer to this is much sooner than you think. There is a lot that goes into renting office space and below are some general guidelines.

  1. 6-12 months before you need office space start gathering information – Which city do you want to have your office in and in what location? Which class of space makes sense for your startup (class A office, B, or C), What types of amenities do you want or are interested in? Which commercial real estate agents can help you and which have good reputations? Which office buildings or areas of town? What will your growth needs be in 2-5 years? Are you willing to sign a long term lease or as a startup prefer short term office leases?
  2. 3-6 months start actively searching for office space – Every city is different as some have less vacancy than others. Also some spaces may need more improvements than others which can take more time so you want to make sure you have plenty of time to look at and compare your options.
  3. Moving into a new office has an impact on company culture – So many startup founders underestimate the impact office space has on their company culture. Moving into a new office gets the team excited and gives them a sense of future. The company is growing so there is momentum and it gives the employees something to look forward to. Communicate the office space search and final space 6-12 months before the move in date and give your employees something to get excited about.
  4. Have your financials in order 2-4 months before you rent office space – Landlords will want to see your financials so make sure you have them in order. You also want to review them to ensure you can afford a new office or larger office. If you can afford to rent office space then go for it, however keep in mind you do have alternatives such as coworking spaces, executive suites, etc if you are not ready. Bottom line just make sure you have your financials in order months before you are ready to lease office space.

 

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Galleria Oaks Office Space | 13215 Bee Cave Parkway 78738

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galleria oaks office space bee cave txGalleria Oaks is a 2 building commercial office property located at 13215 Bee Cave Parkway in Bee Cave Tx 78738. If you are looking to rent class A office space in Bee Cave you have come to the right place.

If you are interested in renting office space at Galleria Oaks give us a call at 512-861-0525 and we can help you determine your ideal office space needs and negotiate the best deal possible.

Building Size – 2 office buildings each with 73,964 RSF of class A office space

Building Height – 3 stories each

Typical Floor Plate – 24,800 RSF

Parking – Parking ratio of 4:1,000 sf. 100% structured parking garage

Amenities – Located in the heart of the Texas hill country and adjacent to the Hill Country Galleria that has over 60 retailers and restaurants for breakfast, lunch, and dinner.

Walking Distance To – Hill Country Galleria and Bee Cave Park

Transportation – 20 to 30 minutes to the Austin Bergstrom International Airport and to downtown Austin.

For info on available spaces or help in searching for and leasing office space in Southwest Austin or Bee Cave Tx give us a call or fill out our website form.

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