How long have you been in your current space? If it’s been more than 3 years you probably want to know that the market has changed dramatically, and the lease you signed may not be serving you as well as it should.
Every day we meet with business executives who have been in their space for more than five years, and the only time they look at their lease is either at renewal time in an effort to negotiate or when they decide that they need new space. The truth is that if you’re not conducting an in-depth review of your space, facility and lease – you’re leaving money one the table.
There are three compelling reasons to conduct regular check-ups:
1. Save Money
Two years ago when commercial real estate was suffering as a result of the deep recession, you had an opportunity to lock in savings and reduce your cost of rent even if your lease wasn’t up.
If you were in a location you were comfortable with you had the opportunity to approach your management company/landlord to discuss extending or gaining access to more space at prevailing rates.
Just because your lease states a specific renewal period does not mean that you have to wait to take advantages of changes in the market. As the market ebbs and flows opportunities are often there if you know what to look for and how to ask.
2. Enhance Growth
If we had to name the single most common (and costly) mistake made in managing commercial space it would be waiting too long to consider alternative space. Three years ago we were brought in to help a $50 million company assess its current space and determine the best plan of action to ensure that the company’s space would support its strategic plan.
We quickly came to the unanimous agreement their current space was not sufficient. It was determined that they needed customized space to allow them to keep their operations unified. The problem was that they waited too long to begin the analysis. We were only nine months from lease renewal, and the process to identify, secure and customize space was going to take 12 – 18 months.
The timeframe prevented the company from taking advantage of gaining the right space that would lower their operational costs and increase efficiencies. Today, they’re still in the current space having been forced to acquire additional expansion space. Their costs are higher, they’re dealing with more complexity and they’re hoping to address their issue at the next renewal date.
3. Increase Productivity
The second most common mistake is the belief that if there’s no intent to move, there’s no need to review space and facilities. The combination of technology and workforce management often allows opportunities to adjust the layout of your space to address your growth needs. For example, it has become more and more common for clients to gravitate toward open collaboration work space, adding significant efficiency to their workspace. More and more evidence suggests that as the make up of the workforce changes, the need to adjust space to support them is important to attaining growth objectives.