Navigating the world of commercial real estate as a business owner can be overwhelming. There is so much to learn, many variables to consider and so many properties that look like they could be a great fit for your company’s needs and goals. Below is a checklist of just a few of the many questions we suggest you ask your leadership team, your broker and your design and construction team to stay ahead of the game as you prepare for your perfect new company home.
Questions to ask before touring
Before you set out to hunt for the perfect space with your broker, these are answers you should determine first as well as how your real estate needs to align with your short and long-term strategic business goals. We’d encourage you to talk through these goals with your broker so they can consider them as they begin their search for properties.
_ 1. How much space do I need?
Keep in mind your business growth goals as well the many new ways of working. Does your company policy allow for virtual work and how will that impact your space needs? It wouldn’t be wise to purchase or lease a space that your growth plan projects your business will quickly outgrow. Estimate how long it will take you to reach your goals. Factor in your current and future employee count. Then, plan for amenity spaces and collaboration spaces as necessary. Can I save money through shared spaces in a building? Do I need less parking due to nearby transit options?
_ 2. What is my budget?
Whether purchasing or leasing, real estate is one of your largest expenses. Be sure it’s a smart decision. This can be done by budgeting accurately and realistically. Just some of the costs you should take into account include:
Acquisition or leasing soft costs (environmental and structural assessments, appraisal, title, legal, design, financing fees, closing costs, permits, broker fees)
Hard costs (building purchase, tenant improvements)
If leasing – rent, operating and tax expense and tenant improvements needed
Miscellaneous cost (furniture, fixtures, equipment, audio visual, cabling & IT, project management)
Moving and relocation costs (moving company, change of address costs)
_ 3. How important is location?
You’ll want to determine how important location is to you before you begin looking. Location is often a factor impacting price and the ability to attract and retain talent. Consider your priorities: would it be more important for your office to be located near public transportation? Central to your clients’ locations? Central to where your employees live? What type of nearby amenities are important? The answers to these questions will help you narrow your area before you and your team begin viewing potential spaces.
Questions to ask about each property
You’ve discussed all the above questions (and many more!) with your broker and are satisfied with the answers. Now it’s time to begin touring properties. Be sure to ask your commercial realtor or broker for their expertise when it comes to details about the spaces you are touring. Here are a few questions to consider.
_ 1. What is the building’s after-hours protocol?
This is an especially important question to ask if you are leasing in a multi-tenant building. It could cover anything from charges for utilities after regular business hours to the provision of security.
_ 2. If you are looking at the purchase of a condominium, does the property have an Owner’s Association?
If so, be sure to read this document closely and understand your rights and liabilities relative to your owned property and all common and limited common elements of the property.
_ 3. Do you understand lease and purchase terms that are important to your goals?
There are a number of obvious economic terms such as lease rate, operating costs and tenant improvement allowance but there are many other important terms you need to understand a few of which are, renewal and expansion rights, subletting and assignment. Do you need an early termination option?
If purchasing, you will want to make sure you have appropriate due diligence and contingencies in place before committing to buy.
_ 4. Is the property zoned correctly for your use?
This is an important question and one that needs to be determined early in your purchase or leasing process. City zoning determines:
If your building and business use is allowed at this property
Building, signage and other requirements
Work with your broker to understand the zoning and determine if variances, conditional use permits or rezoning might be required.
Once you have shortlisted properties also be sure to review these important questions:
_ 1. Is everything up to code?
This is an important question and a thorough building evaluation may be required. Your broker, architect and contractor can help you to assess this. It will be important to negotiate clearly which party is responsible for bringing the building into compliance.
These are just a few of the questions to ask on your journey to find the optimal property for your space needs. There are many more so be sure to work with a team experienced in commercial real estate!
If you’re ready to take the next step with a lease transaction, sale or acquisition of a property or purchase of a new building, connect with KimbleCo. Our combined over 60 years of experience make us the best choice as partners in finding your new space.