A Different Market Needs Different Service
Oct 27, 2015
You Need to Move, But You Can't Find Service Fast Enough
When I started as an office-leasing agent in 1984, the process to secure office space took on average between six to nine months to complete. Mainly because the market back then was soft, with a vacancy rate of around 18 percent. Unlike today, tenants had endless options of office space with no rush or pressure to sign a lease before seeing the place. Tenants would take their time, reviewed multiple locations and spaces before they made their decision.
Historically, landlords would also offer generous incentives for a tenant to move in. They would build out the space for them ahead of signing a lease, which gave tenants plenty of time to work with architects and contractors to ensure that they got the right look, feel and functionality they were looking for in their new office.
Often times, this process took weeks, if not months to complete. This doesn't even include the time it took to actually build out the space. Once the lease was finally signed, the next big step was for the tenant to line up all of the necessary service providers in order to complete their office move. This included everything from hiring moving companies, wiring the telephones, installing the office supplies, etc. Today, all of the above needs to be completed in 60 days or less for most start-ups or second round tech tenants.
In such hot market like the Bay Area, landlords today are not interested in extending their vacancies. They too are looking for quick turn around next to no concessions and asking tenants to contribute more of their own money and time to getting their office space ready for move-in condition.
Traditional tenants such as attorneys, accountants etc. are not immune to this "hurry up" offense in securing new office spaces. They have to compete for space in this very tight market with not only other traditional tenants, but also the newly funded tech companies who are in urgent need to open new offices immediately.
Tenants now fully understand that they must move quickly– fast isn't fast enough in this market. What they don't understand is that all of the services necessary to complete their move will create a major roadblock for an efficient office move. Everything needed to get an office move-in ready today, such as movers to transport furniture, electricians to install additional electrical sockets, and more are all running up to six to eight weeks on average.
So what can tenants do to un-jam the roadblocks?
1. Book ahead. Once a firm has decided they need to move or open an office space, immediately begin the booking process for all of the services you will need. Get all of your vendors picked out as early as possible and commit to a target move date. You may also consider putting a deposit down on these services ahead of signing a lease. Although this can be risky, if you fail to move on time, the potential deposit loss would still pale against the cost of signing a new lease and having to pay a costly monthly rent on a new space.
2. Try trading office spaces. Another option to consider is trading office space and equipment with other tenants. A recently launched service called TradeAddresses helps tenants do just this. TradeAddresses is a member portal that shares spaces that are not on the open market and not longer fits the needs of its current tenants. Clients of TradeAddresses can then not only trade their leases, but also trade office furniture, equipment, IT; everything that would allow two companies to simply walk into each other's spaces and start working. You can find more information by visiting TradeAddresses.com.
Photo Credit: Jeffrey via Compfight cc
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Written by: Hans Hansson
Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 30 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email firstname.lastname@example.org or call him at (415) 765-6897. You may also check out his website, www.commercialspacefinder.com.