In 99% of cases, the perfect office space will be just out of reach of your budget. When this happens, the worst mistake you can make is forgoing a close to ideal space because of the price! In this article we’ll show you how to make it work.
Don’t spill your milk and then cry about it!
What many companies fail to account for is the opportunity cost of not securing a suitable space within their original, scheduled timeframe. When this happens the company usually continues to compare properties to the one that got away.. and unfortunately, the other properties only compare poorly. At this point, the company loses months of time spent looking for the next space opportunity, as well as missing opportunities to grow their business and hire additional employees. Unfortunately, only after learning this painful lesson are most companies able to commit quickly to the next and/or second best location.
A smarter option: use free rent as a stepping stone to afford (and grow into) a higher-priced space.
The perceived high cost of a location is often only felt in the first year of the lease. As the company grows, the business also grows in its ability to support a higher rent from increased revenues. To bridge the gap until then, work with a skilled tenant broker and negotiate a period of free rent. A free rent period typically occurs in the first year of the lease, when the business is still a bit too small for the space. Thus, free rent is an excellent stepping stone to afford a space that’s just beyond your current budget.
First come, first serve - use first mover advantage
One of the challenges in searching for office space is not having a finger on the pulse of the marketplace. In today’s environment, every desirable space opportunity faces stiff competition from other tenants. Failure to move quickly and marshal resources towards a financial commitment often result in the decision being made for them by the landlord, when the space is leased to a competing tenant. Being prepared to move quickly will allow your company to position itself at the top of the list of competing tenants when leasing velocity is high!
It’s easy for a tenant to accept destiny that a “perfect” location “wasn’t meant to be” in an effort to rationalize this learning process, but we prefer to flip this argument and ask, imagine where your business would be if you had made the commitment and moved on from thinking about spaces to focusing on growing your business?