Some of you may know me as working on residential projects – however, when I first started in this field, I was working with firms that specialized in corporate interiors and had the opportunity to work on some of the major law firms and professional organizations in New York City. I want to share a few tidbits that I have learned from working on commercial interiors.
I was bidding on a project for a growing tech company who were expanding to a second floor and also refitting their existing occupied floor. One person was assigned to act as the point person in the selection process for assessing and interviewing design firms. I was the first to be invited to participate. During my initial telephone conversation, it was clear to me that they were also working on their lease while this selection process was underway.
In today’s economy, it is understandable that all companies, big and small, look to save money, especially when the company is growing in uncertain times. I always find it amazing that these companies will forego retaining the services of designers or architects, as they consider it to be a “luxury” and unnecessary since the landlord has offered a monetary concession toward the build out of their space. The build out can be done by the prospective tenant who will hire a contractor or having the landlord take responsibility for the build it out by retaining a contractor.
It’s a simple scenario – and this is how it goes. The landlord:
- evaluates the lease term, square footage and basic construction costs
- comes up with a formula and adds this to your rental
- tenant does not spend incremental budget on construction
The landlord has “saved” your company the effort of allocating additional budget for construction. You believe this is a win-win, BUT, the landlord has calculated a rental that is in his favor and your company has not necessarily thought through some important issues. In many cases, more pertinent to smaller businesses, questions are not asked by the negotiators for the company, as they are not usually directly affected by what is required for the daily operation of their organization.
For example, how many electrical outlets are required? What type of connections, electrical or otherwise, is required for your IT operation? The hours of your operation will determine what additional requirements you may need ( i.e., additional security, coffee area, etc., receiving deliveries, filing capacity). Depending on the nature of your business, the productivity of your staff may be affected by the type of lighting that the landlord is going to install. If you are negotiating for a lease term longer than 7 years – hire a professional to do a needs evaluation. They will help you formulate ideas for the best use of the space. It is risky to rely on casual assumptions such as, “ well we have five offices, a conference room, etc. etc. – I guess we should have 7 offices, and double the size of the conference room–yeah–that’ll work”. Now you have a conference room to accommodate a meeting you have once every 6 months, but its too big for meetings with 6 or so occupants every two weeks. What a waste of valuable space!
Hire a professional, let them evaluate your needs and your growth potential. They can incorporate your needs and future plans into the design. They can offer ideas for the best lighting and determine what your equipment needs electrically. Then you will be prepared when you sit down at the negotiating table with your landlord, with a list of priorities to discuss and gain commitment from the landlord, before you settle with the landlord’s standard offer. These are uncertain times, and everyone is being cautious, so you won’t get everything – but get what will save you headaches, mistakes, and unnecessary money. You are not like ”every other tenant in the building” – this is your company and it has to function for you to succeed in your business!
If you find yourself approaching a new lease in a new or existing space, think of your company’s needs, and if you find yourself in a quandary – feel free to give me a call, I’d be happy to make suggestions.