"Office Space Leasing Process - An Overview of Leasing Office Space"

Essentially, an Office Space lease is much like a partnership agreement in that it sets out the parameters of a business relationship. When everything goes as planned, most any office space lease will serve the parties well but the true test occurs when there are hiccups in the relationship. If the office space lease has not been carefully drafted, a hiccup can become a major problem for one or the other of the parties. Tenants often loose sight of the fact that the "Standard Form Office Space Lease" represents the landlord's wish list and if not appropriately modified, may not serve their interests when issues arise. On the other hand, a sophisticated tenant will often request changes to the Office Space lease that, if not fully understood, can cause unforeseen difficulties for the landlord as well.

The potential for adversity can result from many things. The focus of the Office space lease negotiations is typically directed toward the issues of base rent and concessions. A host of other important concerns remain that are often overlooked, misunderstood or under-negotiated, even by sophisticated landlords, tenants and their real estate representatives.

The information and training available at this site has been designed to enhance the knowledge of those already experienced in leasing office space and commercial real estate. On the other hand, those with little or no experience will find it also provides a "Quick Start" program of instruction in the art of leasing an office space or other commercial real estate. Essentially, the more significant issues are highlighted and practical ideas and suggestions are offered that will help you determine what works best for:

•	Understanding the office space lease process, from beginning to end...it's not rocket science, just good business practices
•	Understanding key office space and commercial real estate terms
•	Analyzing a tenant's needs for office space and determining their square footage requirement for their office space
•	Assessing the tenant's lease office space vs. purchase office space decision (cost of occupancy analysis)
•	Providing a method of office space property comparison analysis based on a market survey Developing the critical Request For Proposal (RFP) for Office Space
•	Negotiations including lease clause analysis for the office space and other issues of significance to leasing office space

THE PROCESS - LEASING OFFICE SPACE AND COMMERCIAL REAL ESTATE

Since the process itself begins with an evaluation of the tenant's own needs for office space, continuing to look at the process of leasing office space from the tenant's perspective has proven to provide a continuity that is otherwise difficult to achieve. It is also in the landlord's best interest to insure that a tenant looking for office space has, in fact, taken the proper steps in fully determining their wants and needs for their office space.
Successful negotiation for office space requires knowledge and empathy with regard to the significant issues faced by the opposing party with office space. As a result, a balanced perspective on issues typically affecting negotiations of office space between the landlord and tenant.

The following outlines the key components of a tenant's successful campaign to relocate their business operations to new office space:

1. Determine Office Space Requirements / Analyze Needs
a. Location-Where do you want your new office space?
b. Amenity and Service Requirements in your office space
c. Office Space Components / Projections for Staffing your Office Space

2. Survey the Office Space market TOP

3. Select Qualified Office Space Properties
a. Location of new office space
b. Amenities and Services provided with the office space.
c. History of Current Landlord with other office space tenants in an office space only building.

4. Technical Office Space Property Review / Physical Tour of Potential Office Space

5. Proposal Process for Office Space
a. Prepare the Request for Proposal (RFP) for your office space
b. Distribute the RFP to Qualified Candidate Office Space Buildings
c. Review Proposals (landlord responses)
d. Evaluate Offers and prepare the Comparative Office Space Lease Analysis
e. Background Report on Owner Performance, Functional Histories, Tenant Satisfaction (with their office space)
f. Technical and Location Data is Reviewed for the Office Space

6. Negotiations for Office Space
a. Office Space Negotiation Checklist
b. Solicit Input from Legal Counsel specializing in Office Space
c. Implementation of Tenant Resources for office space
d. Mutual Execution of Office Space Leasing Document

7. Planning / Permitting / Construction (if applicable) in New Office Space

Identify an Office Space Project Team

In its simplest form, the Project Team will consist of the tenant one looking for office space, often represented by the owner of the office space, office manager or other trusted employee, and a commercial office space real estate broker. The more complex the requirements for office space, the greater the number of participants but in any case, it is most important that daily lines of communication be established. This communication will help coordinate the office space search team's efforts and allow the team to present a solid front to prospective office space building owners and office space agents.

With many smaller companies the principal often tries to do it all when looking for office space. There are so many issues attached to moving an office space or business operation from one location to another that a single individual can be quickly overwhelmed. Whenever possible, others should be designated to help work through the day-to-day details of searching for new office space, leaving the principal free to concentrate on guiding the process and making final decisions.

Needs Analysis for New Office Space

At this stage, it is critical that the Office Space Project Team fully analyze the client company's needs for their new Office Space. The how-to course includes a detailed, yet easy to use, program designed to assist a tenant in this sometimes arduous task of searching for new office space. Any manager, employee or consultant of the tenant searching for new office space, should be encouraged to participate, as is determined to be appropriate by the Office Space Project Team.

Areas that should be covered initially include:

• Office Space Lease renewal versus Office Space relocation vs. purchase Office Space option • Corporate objectives for new Office Space • Importance of the office space building attributes such as location, image, services & amenities • Office Space Lease terms and cost • Legal parameters for the new Office Space

With larger office space requirements, An architectural office space planner should be included on the Office Space Project Team. The office space planner can meet with designated personnel to help identify the desired physical attributes of the Office space facility. In any case, items that need to be addressed include:

• Efficiency of the office space and desirability of current office space • Size of offices, open areas and warehousing areas in new office space • Size of common use areas in the office space (conference, copy, break and storage rooms) • Computer room requirements for your office space • Finish standards for Office Space

Once the survey is complete, a summary of the office space architectural requirements can be developed that will become the foundation for all subsequent Office Space investigation. An accurate project schedule can also be established based on the architectural requirements and the results of the Office Space Needs Analysis.

It is important for a tenant searching for new office space to have the ability to predetermine their office space square footage requirement for their new office space before initiating an office space market survey. Easily accomplished using a worksheet provided with the how-to course, the tenant searching for new office space describes, in detail, their proposed use of the office space. Performing this evaluation in a step-by-step format can help the tenant think through exactly what office space components are or are not required, and then match these components to their office staffing projections in their quest for new office space.

The above referenced spreadsheet offers sufficient detail for even the largest and most sophisticated office space tenant but remains simple enough to be valued by smaller office space tenants as well. The form makes provision for each possible shared component of the office space (i.e. reception, conference, coffee bar, copy/file, etc.) and inspires detailed thought with respect to individual work areas such as private offices in the new office space . The form then converts these office space needs into a "useable" square footage requirement. There is also an area within the form to note the wants and needs associated with each office space component (i.e. Reception Area: built-in reception desk; 4-guest seats; elevator exposure; locate adjoining guest office space and board room). This information not only helps build consensus within the tenant's organization but also proves invaluable when communicating tenant's office space needs to the office space planner.

This simple step will also help prevent false starts and better insure that the end result meets the tenant's needs both now and over the entire term of the office space lease. This is VERY important in your search for new Office Space

Presenting the Office Space Market Survey

Based on the results of an (office space) market survey, it is useful to present the various space alternatives in a format that makes it easy to compare available Office space to the tenant's stated objectives. Decisions can then be made as to which Office Space properties qualify for the Office Space property tour.

Office space market knowledge is possibly the most important aspect of the survey. It is essential to know general office space market conditions and to have a keen awareness of the subtle dynamics of each sub-market to insure the accuracy and thoroughness of the survey. This, of course, is one of the primary reasons that a tenant will seek out the assistance of a real estate broker or office space professional. Because quality database/presentation programs , are often available only in many major metropolitan office space leasing markets, I often turn to the Internet to seek information on the smaller office space markets, visit a quality search engine and do some investigation in a quest for office space.
Essentially, forms in Microsoft© Word and Excel which provide the ability to list and compare pertinent base office space data such as the sub market; class of office space building; office space rental rate; expense stop; parking ratio; office building factor, etc. together with the data relating to the available office space at each property. They also allow for the comparison of important informational items such as office space ownership, office space property management, year of construction, amenities and provides space for relevant comments about your office space.
It is useful, using a map of the metropolitan area, to note the general location of each prospective office space. Additional detail can be provided through the use of sub-market maps on which the exact location of each prospective office space building has been pinpointed.

Physical Tour of Potential Office Space

Arrangements can now be made to tour candidate office spaces and appropriate personnel are encouraged to attend. As with any tour, it can become difficult to remember details on the office space as the tour proceeds from one office building to the next. It has proven helpful to provide the tour leader with a form on which to document the tour participant's thoughts about each office space before going on to the next. Although it may seem insignificant at the time, this small step becomes an important part of the search for office space process and remains useful when a final decision must be made between prospective office space finalists.

Building Comparisons for your Potential Office Space

Decisions can now be made on how favorably each office space compares to the tenant's ideal, as delineated in the Office Space Needs Analysis and the actual (office) space layout (i.e. architectural requirements, separate office space). The 3 or 4 top contending office spaces are then asked to prepare a preliminary office space plan. The efficiency with which one office space or the other accommodates the tenant's needs often forms the basis of a "tiebreaker" between two office spaces or serves as a method used to trim a lengthy list of candidate office spaces. Given the cost savings and stronger negotiating position that can result, tenants should always take into consideration for office space the potential for reuse of the existing improvements in their office space.

Office Space Request For Proposal / Letter Of Intent

The formalized Request For Proposal ("RFP") represents a compilation of the many considerations that a tenant might have and should be customized to reflect their specific needs (for new office spaces). Just as the office space's standard form lease document represents the landlord's "wish list", the RFP serves in that same capacity for the tenant searching for office space.

Materials provided with the how-to course include sample RFP's for both office spaces and industrial uses. The content of these RFP's includes every office space tenant requirement that we have seen over the years and each has been postured, from the office space tenant's perspective, in what we consider the most effective manner. Having a comprehensive sample of the RFP available for reference helps ensure that the (office space) tenant has addressed all of the important issues. One should also note that the RFP, once presented for the office space, then becomes the basis for a systematic procedure used to document the negotiation and help maintain a focus on issues not fully resolved between the parties regarding the office space.

Most major office space lease negotiations are founded upon an RFP, which might later result in a letter of intent or statement of terms for the office space. Even if non-binding, it will be difficult to vary those terms for office space; accordingly, the importance of initially dealing with all items of significance in the RFP cannot be overemphasized, from both the landlord's and the tenant's perspectives on the office space.

1. The parties' negotiating leverage will be reduced if provisions for office space such as options to extend or terminate, liability limitations, escalation and security deposit provisions, rights of first refusal, and other items of significance are not included in the RFP or letter of intent for the office space.; 2. It often serves both the landlord's and the office space tenant's interests to spend the extra time on the detail of the RFP and/or letter of intent. This can serve to minimize the misunderstandings that might otherwise crop up during the course of negotiations, together with the associated cost of office space attorneys, etc. 3. In order to preserve that an RFP or letter of intent not be binding for a particular office space, the document should not only provide as such, but should further provide that it imposes no legal obligation to continue negotiations to reach agreement for the office space. Alternatively, one approach which often finds favor is to provide that the parties are obligated to negotiate in good faith for the office space and the like, but that if no formal agreement is reached within a prescribed period of time, either party may terminate the negotiations for the office space. Although elementary from a legal perspective, it is important to remember that a document will not be enforced for the office space if it omits an essential part of the bargain. Thus, if a letter of intent is to be enforceable, it should highlight all of the basic terms for the office space.

Lease Clause Analysis for Office Space- Issues of Significance

While it's true that office space brokers, landlords and office space tenants have become much more knowledgeable over the years, this knowledge has generally been gained at the cost of a bad experience in a quest for office space. By its very nature, this type of learning when searching for office space often has limited benefit since it is generally very narrow in scope and relates only to the bad experience itself.

By way of example, a tenant who has been burned once by the operating expense provisions of a office space lease will concentrate on that issue during any subsequent office lease negotiation. The problem, of course, lies in the fact that there are a thousand different ways the landlord can structure the operating expense recapture in the office space lease. Unless the tenant and/or the tenant's advisors have a thorough understanding of all the nuances surrounding this issue, in the office space lease the tenant might once again be "cruising for a bruising". The goal is to educate you on your quest for office space, pure and simple, so that you are able to negotiate with a "big picture" perspective.

Consider an example. If the tenant searching for office space has never experienced a casualty (i.e. fire, flood, office theft), then the casualty provisions of the office space lease may not be viewed with a large degree of concern when, in fact, should a casualty actually occur, the potential negative impact on the tenant in the office space could far and away exceed any unexpected exposure to the office space building's operating expenses. The majority of office space tenants simply accept the landlord's language on issues such as this, largely because they just don't know how to evaluate the issues involved in office space or commercial leasing . The result is an unlucky few who pay a high cost for this in attention to detail in their office space or commercial lease. You when choosing new office space definitely DO NOT want to be one of these unlucky few!