Consider more than cost
With the uncertainty of how long low rates will hang around, you may be tempted to commit to the offer with the lowest price tag. However, there are factors that can inflate your actual cost. Utility, maintenance and improvement fees can hide within a hastily signed document.
A careful review with a real estate professional can weed out deals that are too good to be true and help you bargain for favorable terms. For example, a clause that ties rent increases to tangible market figures can avoid exaggerated rate spikes. You can also work to include exit or expansion options.
“Rate is very important right now, but I feel like the flexibility in the lease now, more than ever, is something tenants really need to keep an eye on,” Kahn says.
Many property owners are struggling financially, so it is imperative that you research the stability of the landlord. If the building goes into foreclosure, you may be liable for additional costs or be shuffled around by a new owner.
Open layouts and flexible equipment can squeeze more productivity from fewer square feet, and utilizing new technology and energy-efficient fixtures can trim your overall expenses. Some companies are implementing strategies, such as hoteling, that don’t strap employees to a certain workspace.
And don’t downplay the importance of location. Though you may be able to get deep discounts in a less desirable area, you need a place that employees and customers enjoy. Favorable factors, such as ample natural lighting, can increase productivity and add to your bottom line.
Also, consider the benefits of moving across city lines, as business-hungry municipalities may offer tax incentives. But before you pack up, calculate the total charge of such a venture. A low rate may be enticing, but the cost to resettle may outweigh the discount.
Overall, there are savings in real estate, as long as you take the time to evaluate your company’s long-term needs.
“Each tenant has different needs, and it’s critical that those needs are taken into consideration before adapting a one-for-all technique,” Bolter says.