My friend Justin Bedecarre of 42 Floors reached out to me recently with such a simple request. “Ashley, can you write a short little blog about how to lease office space?” his request read. Given that I’ve done this exercise a few times in my 18-year career, I thought it would be simple to write about how to lease office space.
But when you actually think about the process of securing the company’s next lease, there is A LOT that goes into a significant real estate decision (and are there any insignificant ones)? Also, if you Google “leasing process” you’ll find some pretty dull process maps. It’s hard to get too excited about a flow chart, and I decided I wanted to spare you the experience of going back to grad school to understand the details.
I know that Justin and his colleagues are interested in early stage companies. Emerging growth outfits are pretty vastly different in many ways from corporate users. However, whether you are IBM or just incorporating, the thinking and the major concepts in procuring space should be similar in that we all want our staff to produce and work in an inpiring, yet cost effective environment. So I thought I would start at square (foot) one and begin a series of three posts on the topic of how to end up the proud occupier of a new efficient, affordable office space that both you and your investors/shareholders will love.
Here’s the process in 3 Easy Steps, Justin:
:: Figure out the Why – which we'll talk about here
:: Address the What (where, how much etc.)
:: Talk about How you will execute
Why Baby Why
We all live in a fast-paced world today and face risks from uncertain economic, business and political pressures. A commercial lease, by its very nature, is a long-term commitment that must be thought out carefully and compared to a business plan. To put it another way, real estate can be a millstone or a springboard for business success.
Let’s start with a simple premise: why do operating companies have real estate? Even in our mobile world, the office provides a place to “make the doughnuts.” We produce, review, think and collaborate in our offices. The office also provides a secure and confidential place to conduct business (Starbucks is great for a lot of things, but people can sure get into your business). Your space provides a place to house critical infrastructure.
I realize there is a popular notion that we can all operate without a physical presence (aka an office), but I don't believe that will ever really be the case. Remember all that talk about the paperless office – how's that working out for you? Please see my friend Coy Davidson's post Why Office Space Isn't Going Away.
I Like What You’ve Done With The Place
Of course, your physical premises can say a lot about you. It is a physical expression of the company: it can help shape the culture and define the image of who you are. I’ve seen companies put all manner of public recognition and value statements on the walls. One doesn’t have to be Google or Apple to use their space to help shape their company and what folks think about it.
Work with a good architect and perhaps a brand or advertising company to develop your vision of what the space can be and what it can do for the team. You can use those dollars you send to the landlord every month as part of your marketing plan, as well as a place for your team to make millions.
Before the “What”
If you are an entrepreneur, take time to meet with your investors, your board and other key stakeholders. Get the "right people on the bus" and you will make far better decisions for the enterprise as opposed to personal preference. Those in corporate real estate know the drill, but meeting with the "user group" and listening carefully is important. I know that people may have grand ideas, but dreaming is not a bad thing. We'll get to the budget formation a little later.
A great way to get ideas about how spaces can work – or not work as the case may be — is to tour around and see what others have done. Once again, your friendly architect or broker should be able to get you into other’s spaces in order to get those juices flowing. Investing time here is sometimes hard, but I've done operating space tours with seasoned real estate directors, and I love to see the light in their eyes when they hear or see something new and say "Wow, what a terrific idea!" As you make the rounds, think of how prospective employees, guests, investors and even your Mom will think about your space. In your mind’s eye, what kind of impression will people get as they walk through your new, amazing office?
If you are interested in the latest thinking on “workplace strategy," trade organizations such as CoreNet Global can get you access to the latest thinking. Also, most real estate service providers can get you any number of white papers on the topic. This certainly isn't required, but simply an available resource as the space you want to create takes shape.
So now we've talked about why you need offices space. If you'll take time on this step, it will pay huge dividends later. Fundamental to this "why" is your leadership and understanding of how you want to use the space. In today’s world, your office space certainly can’t be just overhead or place to put butts in chairs. There is a coming war for talent in the United States. Let’s get Real and turn your rent payment into a competitive weapon that will help retain great employees and achieve the holy grail of real estate: a boost in productivity.
Now lets figure out what that will be.