Tiring of Your Office at Starbucks?

 The Miami Herald and Florida Trend magazine both recently had articles about a new style of executive suites or shared space. These offices are more open and use the concept of hoteling.

Hoteling is where people have non-exclusive access to a work area. Accounting firms frequently do this for their auditors and people who are not in the office on a daily basis. The worker schedules a day/time to come in and the office manager directs him to a specified work station where he can plug in his computer, his direct line will ring to that phone and many times his files are delivered to the desk so he is up and running quickly. It’s an efficient way to provide workspace to employees who spend more time out of the office than in it.

The idea behind these new shared office executive suites is to draw out the home office entrepreneurs and business people. The lonely home office person can be around others and hopefully collaborate, network and benefit from the interactions. Another benefit for the “member” as they are called is that since the space provider is selling shared space, the costs are less when compared to a traditional executive suite.

I love this idea. For a start-up business, an executive working remotely and many small businesses, this concept gives them a legitimate business address, access to conference rooms, beautiful professional work areas that help maintain focus and generate creativity.
The flexibility of this concept is found in the pricing. Pricing depends on the type of work space (dedicated versus shared), the amount of monthly usage, and number of people. They provide storage lockers so you don’t have to schlep your files every time you pop into the office.

So if you are a small business looking for an office solution, you may want to consider this option. The work space is beautiful with top-of-the-line furnishings. Typically real estate costs are the highest budget item behind payroll. This makes an office a more affordable option.

Buro Miami   3250 NW 1^st Avenue – Midtown   www.buromiami.com

MiamiShared  900 Biscayne Blvd.  www.miamishared.com

 White Table Foundation  1109 Las Olas Blvd., Ft. Lauderdale 

www.whitetablefoundation.com

Back in the News Again!

In the March 3^rd edition of Miami Today, on page 16, I’m quoted extensively about trends in office sublease space.  Interestingly enough before my interview with Marilyn Bowden, the reporter, I did a little research and discovered that the amount of sublease space is declining.  That’s where we came up with the nifty graph in the article.  (You can click for here for the full article)

Subleasing your office space is usually a lengthy process that requires your landlord’s consent among other things.  In my 18 years of experience, I have never seen a company make a profit.  If you can recover more than 50 cents on the dollar, pop the champagne.    Enjoy the article and if you want to get rid of extra office space, give me a call.  Subleasing may not be your only option.

Frequently Asked Questions About Office Space

Q:  Due to the slow economy, my company has cut back and now we do not need our current office space.  What can we do with it?

 The most important thing to always remember is that your company has signed a legally binding agreement with your landlord to pay a monthly fee for your office.  The landlord expects you to abide by that agreement and always pay your rent on a timely basis.  Typically, your landlord will not negotiate with you if you are not current with your rental payments.  However, you do have some options to consider.  If you have a good relationship with your landlord, the first step is to discuss your situation with the landlord openly and honestly.  Sometimes a landlord will offer you a few options such as a payment plan to get you over the slump or assist you with finding someone to take your space, just to name a few. Also speak to your office neighbors.  Do they need additional space?  Would they be interested in your office?  Do they know another company that might need office space?   You should also consider retaining the services of a real estate broker to assist you with a sublease or an early termination of your lease.  You would pay a fee for this service; however, it is paid once the broker has completed the assignment.  A competent broker should clearly explain the current market conditions and estimate the time necessary to sublease your space.

 Q:  We want to renew our lease with our existing landlord.  We have been here for years, so why would we need to use a real estate broker?

 You want to make sure that the playing field is level when negotiating your lease renewal.  Your landlord negotiates leases every day and you do it perhaps once every three to five years.  Who do you think understands the process better?  This year I have seen several cases where the long-term tenant negotiated directly with the landlord and got stuck with an “above market” deal.  They regretted their decision not to use a tenant rep broker.  The most surprising fact is that your landlord will pay your real estate broker, so you have no out-of-pocket cost.  Your real estate broker should know the current market conditions and have information about recent transactions in order to use this information to assist you.  Just make sure that you are choosing a real estate broker who focuses on the type of commercial real estate you occupy. Real estate professionals focus on different areas of real estate, so make sure you choose someone who is knowledgeable about your type.  A residential broker will know everything about buying and selling house; however, his knowledge of office product will be limited because there are virtually no similarities.

 Q: How much does it cost to move my office?

 Moving your office seems to be an overwhelming task to many people, however, once it is broken into several phases the project becomes manageable.   Planning and an attention to detail is key to a successful move. The first step is to discuss your move with your computer and phone vendor(s).  Obtain a preliminary estimate from them.  An industry standard cost is approximately $125 for each phone and computer line.  Next contact a reputable moving company for an estimate on the physical move.  Modular furniture (cubicles) cost approximately $250 per station to break down and re-construct.  The physical move and cost of the electrician to hook them up is additional.  The most important thing is to always get competitive bids for each element of your move.  Your long-time phone vendor may be more competitive with his estimate when he learns that he must compete for your business.  Moving is also a good time to consider upgrading technology, replacing furniture and other changes to your office environment. An experienced team of vendors can move most offices over a weekend.  Your phone and computer vendor should get access to your new space during the construction to make the installation easier and quicker.  Your moving company should provide you with boxes weeks prior to the move, so your staff can have ample time to pack.  Make sure you have a simple labeling system and mark everything so the movers deliver all items correctly.  This will save a lot of time in the aftermath of the move. Don’t forget to order new stationary, business cards and send announcement cards with your new address to all key business contacts.

 Contact me, Elizabeth Santos,  at 305.779.3133 for a free lease analysis.

What is a Tenant Rep Broker?

When I’m on the networking circuit, I love the reactions of people as they attempt to grasp the concept of my profession.  My niche of commercial real estate is so narrow and focused that many people have never heard of a tenant rep broker.  Let’s dive into the subject and allow me to explain how I fill my days.

A Tenant Rep broker helps companies with their leased commercial real estate.  The type of space can be industrial, office or retail space.   The transaction can be a new location, renewal, expansion, contraction, sublease or termination.  The cost of my services to my client for most transactions – nothing, the landlord pays my commission.  No, this is not a conflict of interest – we’ll save that for a future blog entry.  The value of my services is wide-ranging.  Not only do I save my clients money, but I also save them invaluable time.  I create more value with my knowledge of lease terms, landlords, construction, financial comparative analysis and more.

 Savvy tenants utilize a tenant rep broker to level the playing field.  My typical routine with a standard renewal and/or new office location is:

1)      Meet with a potential client for a half hour to learn about how the company operates and discuss its specific criteria for the office 

2)      Produce a group of properties that fit this criteria. 

3)      The client narrows the field and then we tour those properties.   

4)      The client’s feedback creates a short list and then I solicit proposals from those landlords and the negotiations begin.  I produce a financial analysis comparing the different properties and the various rounds of proposals. We may require a meeting with their architect to modify the layout, get construction estimates and other details.  I take care of these things.

5)      I obtain the landlord’s initial lease draft then insure all our business terms are in the lease.  I provide the client with discussion points on potential modifications that the client can discuss with its attorney.

This process sounds simple, but it can take anywhere from six weeks to over a year depending upon the complexity of the transaction.  I keep everyone on track and challenged with my candor, market knowledge and aggressive negotiating.  How about it, are you interested in an advocate for your office lease negotiations?