Determining Required Space
The process of signing a lease requires an evaluation of the tenant’s own needs for office space, but looking entirely at the process from the tenant’s perspective is ineffectual. Successful negotiation for office space requires knowledge regarding the significant issues faced by the landlord.
Key steps to relocate a tenant’s business operations to new office space:
1. Determine office space requirements / Analyze needs
In this step, a tenant must think of where he or she wants the new office space, the amenity and service requirements of the space and the projection for staffing the new space. The tenant should also determine a Project Team, which will consist of the tenant looking for office space, the owner of the business, office manager or other trusted employee, and a commercial office space real estate broker.
2. Survey the Market
At this stage, it is critical that the Office Space Project Team analyze the company’s needs for its new offices, addressing the following items:
- Efficiency and desirability of the new office space
- Sizes of offices, open areas and warehousing areas in new office space
- Size of common use areas in the office space (the conference, copy, break and storage rooms)
- The finish standards of the office space
3. Select Viewing Properties
A tenant searching for new office space must have the ability to predetermine his or her office space square footage requirement for the new office space before initiating an office space market survey. Performing this evaluation in a step-by-step format can help the tenant think through the most suitable office space components, and then match these components to his or her office staffing projections. A few other things to consider:
- Office space lease renewal, compared to relocation and the purchase of office space;
- Objectives for the new office space
- Importance of the office space building attributes, such as location, image services and amenities;
- Lease terms and costs for each office space;
- Legal parameters for the new office space.
4. Tour the Space and Review Property
New York Office Space agents can now make arrangements to tour potential office spaces and will encourage the Office Space Team and other appropriate personnel to also participate. The NYOS team will then document the tour and its considerations.
5. Submit the Proposal
During this step, the real estate agents and the tenant team develop and prepare the Request for Proposal (RFP) for the office space. The formalized RFP formally compiles the many considerations a tenant might have and should be customized to reflect a tenant’s specific needs.
Just as the office space’s standard form lease document represents the landlord’s “wish list”, the RFP serves in that same capacity for the tenant. Most major office space lease negotiations are founded upon an RFP, which might later result in a letter of intent or statement of terms for the office space. The RFP – once presented for the office space – becomes the basis for a systematic procedure used to document the lease negotiation and maintain a focus on unresolved issues between the parties.
For the RFP, it is important to consider these factors:
- If provisions for office space, such as options to extend or terminate, liability limitations and other items of significance are not included in the RFP;
- If the RFP is thorough, it can minimize potential misunderstandings during the negotiations;
- If the RFP is not to be binding, the document should clarify it imposes no legal obligation to continue negotiations for agreement on the office space.
6. Engage in Lease Negotiations
First, tenants need to compare the base office space data, such as the sub market, class of office space building, office space rental rate, office space property management, year of construction and office amenities. Next, the prospective tenant needs to solicit input from legal counsel specializing in that office space. Finally, after the implementation of the Tenant Resources for Office Space Agreement, tenants can finalize the Mutual Execution of Office Space Leasing Document with the landlords, sign it and move in!
New York Office Space is a full-service commercial real estate firm specializing in Manhattan commercial properties for local businesses and companies looking to lease space. Our brokers are experienced, dedicated experts in New York’s real estate market, including many facets not limited to; the geography of the city and the availability of the buildings across Manhattan.
NYOS guides its clients through the entire process, beginning with the initial search, through all showings, negotiations and even architectural and construction plans.
Please call or email a New York Office Space broker for details.