Planning Commercial Space Rqmnts

o                               3-6 months in advance of when you want to take occupancy

§                                 Week 1 Define your requirements

·                                 How many employees will you have

·                                 Will you meet customers (meeting rooms, conference rooms, etc?)

·                                 Do you need dedicated space for hosting technology equipment?

·                                 Do you need storage space for product?

·                                 Do you rely on walk-in traffic to increase sales?

§                                 Week 2 Begin Market Research

·                                 Identify the area you want your space to be in

·                                 Identify properties in that area

·                                 Obtain market information on pricing

·                                 Visit and inspect likely candidates

§                                 Week 3 Begin making proposals, open negotiations on selected space

·                                 Meet with space planner, architect, general contractor

·                                 Solicit Proposals for costing out renovations and build out

·                                 Plans can take 1-2 week turnaround

·                                 Cost estimates can take an additional 1-2 weeks to receive

§                                 Weeks 4-5 Review proposals, compare offers

·                                 Review space plans and cost estimates

§                                 Weeks 5-6 Decide on who is going to do the work, receive the contracts from the vendors and have an attorney review the documents

§                                 Weeks 6-8 Complete negotiations and prepare to sign the lease documents

§                                 Weeks 8-11  Finalize plans only after the space is selected and the lease is executed.  Allow 2-3 weeks for this phase

§                                 Weeks 11-14 Obtain necessary permits and any engineering requirements begin construction

§                                 Weeks 14-26 Construction phase.  Final inspections, take occupancy

What do I need to consider when determining my space requirements:

o                               When do I need/want to be in the new space?

o                               Where do I want my space?

o                               What particular buildings are of interest?

o                               Is the view from the office important to me?

o                               How big should my space be?

o                               How many private offices, conference rooms and reception areas do I need?

§                                 Allow 150-400 sf per executive office

§                                 Allow 100-150 sf per private office

§                                 Allow 25-50 sf per Conference Room

§                                 Allow 150-350 sf per Reception Area

o                               How many people will be employed at this location?

o                               What is my budget?

o                               How long do I want the lease for?

o                               Is room for future expansion important?

o                               What are my parking requirements, for employees, for customers?

o                               Will I be meeting/entertaining clients in the space?

Common Terminology

o                               Full Service Gross: Normally used in urban office buildings, it is a set price that includes all costs, utilities, rent, janitorial, taxes, insurance, etc.

o                               Industrial Gross: Normally associated with office/warehouse and some smaller office buildings, the tenant normally pays for utilities, janitorial, trash and the owner covers property taxes and insurance

o                               Net:  This generally indicates that there are things the owner will not pay for. It is similar to an industrial gross but may also include maintenance and common area pass-through costs.  Think of Net as NOT INCLUDED in the rent and realize it is an additional cost to budget for.

o                               Double Net: This is normally associated with retail leasing or free-standing single tenant property.  The tenant pays for all services plus any systems maintenance, while the owner pays to maintain the roof, foundations and side walls.

o                               Triple Net: Like a double Net it is also normally used in retail or free-standing single tenant property.  The difference between Double and Triple Net is that the tenant assumes responsibility for all costs including insurance, walls, roof and mechanical systems

o                               Common Area Maintenance: These are costs added to the base rent and are found mainly in shopping centers and industrial parks.  They include parking lot maintenance, landscaping costs, sidewalks, signs and any other costs associated with space used in common with the other tenants.