Moving to a new office space can be a very daunting task for any company. Some companies have dedicated departments who handle this. Some assign it to a group of employees whose tasks have a similarity to the nature of acquiring an office space. Others who want to be more efficient with their time, directly go to a broker or an agency who can do it for them. Either way, be it through a dedicated department, employee, agency or broker, acquiring an office space takes time. And more often than not, there are unforeseeable delays that happen, that can sometimes derail the business timeline of a company.
Well, all of these can be avoided by a natural foresight that comes from good preparation and being informed of the processes involved in an office acquisition.
Here are the key steps that you have to take note of to adequately arm yourself once you decide to get that new office:
1. Identify your prerequisites
First, you need to ask yourself what the immediate requirements are for your new office. The usual questions that a broker will ask from you are, what size are you looking to lease out, how many employees would you want to house in the new facility, what is the nature of your business, will your operations be in a traditional 9 to 5 or 24/7, have you determined an allocated monthly budget for the rent, when do you need the site to be operational, and what area in the metro do you want to expand or relocate to.
All of these key information will help you determine the right buildings that will be able to accommodate your new office space requirement, making it more efficient by narrowing down your options. If you already have a clear idea of what your requirement is, this won’t be a problem and will only take up a minimum amount of time.
Average time taken up: 1 week
2. Viewing and reviewing your options
The next step is to review the options that you have gotten. You may have already identified the basic prerequisites in the first step, but as most companies do, you may also have specific requirements such as employee accessibility, transportation means, dedicated restrooms, wet pantry, parking allocation, etc.
The best way to identify which building would suit your requirement the most is by scheduling a site visit to the list of options that you have shortlisted and going there.
Average time taken up: 3 weeks
3. Negotiations and Closing
After successfully viewing and identifying which buildings would satisfy most of your prerequisites, you will have to start drafting a Letter of Intent (LOI) to submit to its respective landlord representatives.
Each building has a standard proposal that contains most of the commercial terms that a building imposes on all of its tenants. If you have a broker, it’s their job to negotiate these terms to get you the best deal possible. With their market knowledge, local expertise and network, they should be able to identify what commercial terms they can negotiate with. They can get you a lower base rent, a shorter or longer lease term, a longer rent-free period for fit-out, and building signage rights, just to name a few.
As soon as an agreement to the commercial terms is achieved, a contract containing the agreed terms will be sent to you for final review. Ideally, this should be reviewed extensively by your company’s lawyer and/or broker so that you can still revise entries within the contract that you are not completely aligned or confident with. One of the few pertaining entries that is often overlooked but you should look out for is the Pre-termination and Reinstatement clauses.
Average time taken up: 3 weeks
4. Contract Execution and Payment
After the final draft of the Contract of Lease is approved by both you and the landlord, the final printed copies will be sent to your office for final review and signature. In some cases, a reservation deposit equivalent to a month of your rent is required by the landlord. This is then applied as part of the security deposit once your lease commences.
Average time taken up: 1 week
Once the Contract of Lease has been signed by both you and the landlord, and initial payments have been made, a Contract of Lease is signed and a lease commencement day is identified. Leading up to the lease commencement, usually there is a rent-free period given wherein construction and fit-out of the new office space is allowed.
This ranges anywhere from 30 days to 90 days, depending on the size you’ve leased and the negotiated term that you were able to have the landlord agree with.
At this point, you should have already consulted with contractors and awarded the project to one, for the design and build of your office space. Ideally, consultation with a contractor should be done during the time when you have already shortlisted which buildings to send a Letter of Intent to. These contractors do a free test fit-out wherein they give you a render of the space, layout, costing and timeline of the fit-out. Getting a contractor only after you have already signed a contract will only cost you precious time and resources of your company as they would need time to design, bid, come to an agreement and secure permits with and for you.
Average time taken up: 4 weeks
6. Handover and Move-in
Finally, after everything that has been said and done, your shiny and new office space is ready for move-in for your lucky employees. To make sure that your office space is well maintained and in top condition, you can hire a property manager to oversee things while you focus on what’s most important, your business.
Total Average Time: 3 months
Office space acquisition can take a lot of time and induce a lot of unnecessary stress. But with the right preparation and with the information we have equipped you over this article, we know that you won’t be blindsided by any of the usual problems that come with it. If you want to skip all of these and have complete liberty of your time and have peace of mind, inquire through email@example.com and we’ll be more than happy to help you.
“By failing to prepare, you prepare to fail”