Release Your Brief to The Market
To avoid dealing with multiple agents, you can request that your Colliers professional approach the market on your behalf. With an intimate knowledge of the market and a well-established network of agents and owners, Colliers will act as a single point of contact to uncover all suitable space opportunities. Your real estate broker will also assist in discussions with your existing landlord regarding lease renewal options.
Evaluate and Prepare a Short List
When analyzing alternative premises, consider timing, financial and other incentives that may be offered. A lease renewal option should include expansion and contraction costs, as well as the cost of reconfiguring or completely refurbishing your work space. Aim for a short list of three or four properties.
Evaluate options against your brief, ensuring the property’s benefits match your stated business objectives. Colliers has developed a range of decision making models and matrices. These tools dramatically improve efficiency in the evaluation process.
There are several ways to compare the financial aspects of leasing, including:
- Gross effective rent per square foot
- Gross stated rent per square foot
- Gross and net rent per square foot
- Total occupancy cost per employee
Further detail on these measurements is provided in the Frequently Asked Questions portion of this guide.
Look beyond the square foot rate offered. Some office space is highly efficient, enabling you to accommodate your employees in less space. For example, you may require 5,000 square feet to accommodate your staff in one building while another may be able to house them comfortably in 4,000 square feet. In this instance, it does not make sense to compare the two options based on their rate per square foot. It is more effective to use a cost per employee lease analysis model.
Lease conditions such as “make good” requirements can also impact the attractiveness of a particular option. (For more information on “make good” costs, please refer to page 14.)
Compare Your Options Using a Lease Analysis Model
Colliers International has developed a lease analysis model designed to compare leasing options on a financial basis, using an “apples to apples” approach. The model allows the comparison of proposals from multiple lessors, demonstrating the cost of the financial offer over the life of the lease.
This financial modeling takes into account lease incentives, such as free rent or a greater allowance for tenant improvements, the total rent over the life of the lease including rent hikes and the term of the lease including extension provisions.
Workplace Design and Tenant Improvements
It’s not all about cost. When evaluating your property options, don’t forget to consider the intangible costs and benefits for each property option.
Your workplace designer can help you evaluate each option’s impact on staff productivity and communication, corporate identity, information technology, communications performance and your customer base. If appropriately engaged at step one, your workplace designer will have the maximum positive influence on your workplace brief.
In today’s challenging business environment, it is critical that organizations look beyond the traditional view of office accommodation and the measurement standards normally applied.
Your work space must also contribute to the development of team networks and organizational learning systems. In addition, the office systems must support organizational change efficiently, and with minimal redundancy.
Determine Work Space Efficiencies
By conducting a design site audit of the short-listed options, your workplace designer will determine the work space efficiencies for each property. This process also produces sample tenant improvement designs prior to your agreement on terms enabling you to compare your options based on financial and non-financial criteria.
Your workplace designer will provide the following services during this critical evaluation phase:
- Prepare a detailed existing tenant improvement audit
- Assess items suitable for re-use in the improved office space
- Manage the pre-design process including a review of local authority approvals and code requirements
- Prepare selected site audits
- Prepare a “stacking and blocking” plan
- Prepare preliminary concept designs
- Conduct building services audits
- Provide an opinion of likely tenant improvement costs
Tenant improvement costs
Attaining a tenant improvement that is aligned with your organization’s ideal outcome depends on which components are viewed as necessary and what is discarded during the design phase. It is critical that all aspects to be included in the tenant improvement are assessed to determine their contribution to the overall objectives.
Equally important is the identification and evaluation of the potential components that are excluded. The identification of positive and negative components through the audit process provides the opportunity to maximize the effectiveness of the final result and minimize the cost of the tenant improvement.