Leasing Incentives On The Rise

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screen shot 2022 12 06 at 2.55.53 pmAn Austin landlord suddenly loaded up the incentives to entice one of our clients to move forward with their Class B, suburban office space. This included 4 months of free base rent on the front of a 64-month lease and an increase in their tenant improvement allowance from $20 per SF to $35 (which is a very generous allowance for 2nd generation space). The total in new concessions for our client was around $100,000 or 4.5%.

This was an aggressive change in strategy in the several months of negotiation. We believe that this Landlord is ahead of the pack in making the adjustments needed in the slowing office leasing environment ahead. Another reason for the concession is the Landlord has 2 other spaces of almost identical size vacant in their project. Getting this space leased before the holidays, in advance of a slowing market is the right strategy… and a big win for our client!

Notice that I didn’t say they lowered the base rent… because they didn’t. It is still within $.50 of the rate that was originally quoted with 3% annual increases. This high rental rate is locked in for 5 years and preserves the building’s value for the future. The levers that landlords will use to lure tenants in this downturn will be front-loaded discounts like free rent, tenant improvements, and moving allowances.

Negotiation is of course hyper-local. If a building owner with 100% occupancy is negotiating an office renewal, their rate flexibility will be a product of their desperation. A small building owned by an individual with 50% vacancy will likely have more urgency to collect rent than a large REIT owned office tower. Understanding the leverage of an individual Landlord is important as we coach our clients to the best decisions.

#negotiation #leasing #incentives #recession #officespace #officeleasing #austin #austintx

The Office Correction is Coming!

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Ever since the pandemic, the labor market power has been squarely in the hands of employees. Big companies keep hiring and leasing office space like crazy in a land fueled by Covid stimulus checks and low-interest rates. Not enough people to do the work! Stock values were high and business was booming. Big corporate office occupiers were just waiting for the world to go back to normal. After the major Covid scare was over, employees didn’t want to come back, or else they would quit and find another work-from-home job. 

Now, big layoffs at companies like Twitter and Facebook are going to dominate headlines. What this trimming of the fat is going to do is make the remaining work-from-home holdouts rethink their strategy. Do they want to risk being let go? Are they part of the team if they only work remote from home? Will they miss out on promotion opportunities because they are just a remote number? 

Time will tell, but I think the power is slowly shifting back to the employer. Enough fear and doubt about the economy will have employees more interested in keeping a good job and will start showing more face time in the office. I predict a 12-18 month swing of power back to employers which will help office space be more regularly occupied than the ~60% we are seeing in Austin right now. Those companies that chose to keep a physical office presence should see more desks occupied as the recession takes hold. Fear is a great motivator.

Why Austin Office Rental Rates Will Stay High, Even in a Recession

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  1. Inflation: The cost of everything is increasing and that will include the cost to operate, repair, install new tenant improvements, and build new buildings. This cost will be shared with tenants in higher base rates and triple net expenses. 
  2. Basis Value: Many properties have traded hands during the past 5 years of rapid price increases in Austin. Those new owners now have a higher basis value with the new purchase prices, which come with new expectations and investment return targets. Mortgage holders often have loan covenants that prevent them from signing new leases below a certain threshold. 
  3. Building Valuation: The value of an office building is based on the income stream that the asset generates for the owner over time. If a landlord were to lock in a discounted rate during a short-term economic dip, it would destroy a portion of the value of that building for years. For example: If a landlord were to discount $5 per SF on a 10,000 SF space for 5 years, that would be giving up $50,000 worth of revenue each year for 5 years or $250,000. That same $50,000 income stream sold at a 6% CAP rate equates to $833,333 worth of building value. Huge implications for every dollar of discount. 
  4. Short-term incentives: The landlord has other levers to effectively lower the occupancy cost for office tenants without lowering the base rate. The most common incentives include free rent at the front of the lease, large tenant improvement packages, and moving & furniture allowances. All of these are real savings to the tenant but are front-loaded discounts that preserve the higher base rates for owners. 
  5. Austin recovers fast: Historically, Austin is the last to enter a downturn and the first city to come out of it. The dips experienced here are less extreme than in some of our larger Texas cities like Houston and Dallas. Comparatively, we are “small” too. It doesn’t take many big leases to move a large chunk of the market. 

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  1. Austin is still growing like a weed: New demand is entering our market at a steady clip, which helps absorb some of the vacancies. The 5 county area that makes up Austin is expected to reach a population of 3.3M by 2040, which would make us larger than San Antonio is today.
  2. Slow market reaction time: The real estate market, as a whole moves slowly in reaction to dips in occupancy. The delay can be 12-18 months. By the time the current recession is really felt, we will already be on the other side of it and growing again. 
  3. Patient owners: A few common owners of commercial office space are REITs, Insurance companies, and Retirement funds. These owners are not overly concerned about short-term vacancies. They look at their whole portfolio and try to build value for their own time horizon, which can be decades for some. Sitting on extra vacancy and collecting no rent while they wait for the right long-term tenant doesn’t always seem logical, but may be a perfect fit for their long-term strategy. 
  4. Not all subleases are competition: Increasing sublease inventory shows weakness in the market from a supply side, but in reality, landlords are still collecting rent on those spaces.  If a landlord doesn’t have vacant space of the same size as the available discounted subleases, the extra inventory shouldn’t change the competition for their spaces of a different size. There could be 100 cheap subleases of 30,000 SF and it would not affect the landlord with vacant suites of 10,000 SF and below. These are apples and oranges. Large spaces can’t be easily subdivided into smaller spaces without incredible cost so will never compete for smaller tenants.

Why Big Subleases Don’t Help Small Users

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According to Costar, if you need 50,000 SF of contiguous space in Austin today, you have 55 existing properties to choose from. The reason new office towers WERE leasing so well is that the options for large users were very limited. Not so much now… (and this doesn’t count the 20 properties listed as under construction).

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One example, new office sublease for ~60K SF spread across 3 floors of a downtown building. They designed a very cool layout for a large company, including an interior stairway that connects two floors. Very cool design… but this means that the smallest demisable spaces (keeping construction economics in mind) are 20K SF and 40K SF.

Previously, only a new project could provide the big block availability that large tenants desired to keep their teams connected. As existing buildings are vacated when these tenants grow to newly constructed buildings, you see the spaces left behind being subdivided into smaller suites. As buildings age, it is common for the spaces to be smaller, providing options for small and medium businesses.

If you are wondering why we can’t find 2,500 SF in the Domain, the young age of the project is the reason why! Come talk to us in 20 years and we will have a few options to consider.

Does anyone need space for 100-300 people? Lots of cool options!

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A Guide to Finding Office Space to Rent for a Growing Business

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Are you looking for office space but unsure where to start? Are you tired of googling the words “office space to rent near me” and finding yourself no closer to securing the space you need?

For many businesses, finding suitable office space isn’t just another nice-to-have — it’s mission-critical. But between employee commutes, commercial real estate availability, and simple aesthetics, the “find office space to rent” part of Business Planning 101 is often way easier said than done.

As a business owner, you don’t want to settle for just any office space. You need a space that’s capable of growing with your company. Read on to see how you can finally put those endless “office space for rent near me” searches to rest.

It Starts With Your Company’s Needs

Let’s say you’re in the “We need a new office space.” phase, but you’re not really sure what type of new office you’re looking for. There’s a quick fix for that — do an internal assessment before the search begins in earnest. On that note, here are some of our top tips:

1. Consider Your Current and Future Plans

At the start of the COVID-19 pandemic, many people were predicting that remote work was going to fundamentally change the way companies did business. But in 2022, Business Insider reported what many Americans had already started to suspect — just 5.5. percent of companies chose to downsize their office spaces after utilizing remote work.

If you’re making plans to rent office space, chances are that you’re not a company that’s aiming to be fully remote. However, if you have hybrid teams or long-term plans to offer flexible hours, you’ll want to think very seriously about whether the office spaces you’re looking at can accommodate your needs.

Are you planning to give people a telecommuting option? Do you need an office space that has virtual and in-person meeting capacity? With PwC’s 2021 survey reporting that 72 percent of remote-capable people want a reasonable mix of remote work and in-person work, you might have to consider these issues sooner rather than later.

And what you don’t want is to find yourself turning away top-tier candidates while saying things like, “We just don’t have the office space for that.”

2. Client Expectations

What do corporate law firms, banks, and high-end clothing stores have in common? Their clients all expect a certain aesthetic when they come to the physical building to do business.

And on a human level, this makes sense.  A presentable space gives a sense of trust to the business that you will be working with. It shows good character and a sense of accomplishment.

As much as we’ve all learned that it’s the inside that counts, image matters when you’re choosing an office space.

For this reason, you’ll also want to audit your brand and the image that you want to put forward with people. Is your company a hip and youthful service provider? Do your customers tend to be older people with more conservative business sensibilities?

Landing clients is hard enough in the best of times. Don’t sign a multi-year commercial lease on an office space that leaves your current and future customers feeling uncertain about your capabilities.

3. Your Company Culture

As a manager who has made hiring decisions in the past, you’ve more than likely passed on candidates who had all the skills you needed on paper. Not because you thought their talents weren’t up to par, but because you knew that they weren’t a good personality fit.

When you’re evaluating office space, you’ll need to do a similar fit assessment for your company.

Consider the story you are telling your employees. Are you a collaborative fun place to work or more oriented to corporate formalities?  There’s no right way or wrong way to do business. But you do want to avoid picking an office that doesn’t fully fit with your company culture.

Picture a traditional corporate firm full of staff members who frown upon Casual Fridays. Sure, the pool table and the spray-painted walls might look awesome, but these employees may look at the same setup and feel uncomfortable at the thought of working there.

In the same way that you wouldn’t want to purchase an office space that will make your customers reconsider doing business with you, it’s also important to make sure that you’re renting a place that your employees are comfortable with.

4. Your Budget

Most businesses deal with unexpected costs on a regular basis. Maybe that new product line was so popular that you needed to double your next run. Or maybe supply chain issues and skyrocketing material costs are wreaking havoc on your margins.

Although technically your lease is supposed to be a fixed expense, the dollar amount that you pay each month is rarely ever going to tell the whole story.

Even after you’ve covered the upfront cost of relocating and purchasing equipment, you may still find yourself paying for upkeep, insurance, and property taxes. And while a few hundred dollars here and there might not seem like a big deal at the moment, these costs can add up over the course of several years.

As such, you don’t want to be in the business of spending so much on rent that you’re not able to weather the unexpected. To that end, if your company is just starting out or your revenue sources are still getting established, that downtown property may need to wait.

What to Look For in an Office Space

When you get right down to it, selecting the best office space available is like finding a good business partner. This office is the place where you’ll woo clients, hire your next superstar employee, and spend over 40 hours a week for the next 12 months or longer.

As you search for the perfect office space, here are some factors that you’ll want to consider:

1. Location, Location, Location!

In residential real estate, your surrounding neighborhood can have a direct effect on your property value. And while property value might not be that important to an office lease, location is still an issue worth considering when it comes to your office space. 

Here’s why:

An office space might be perfect for your needs on paper. It might have more room for your tech hardware than you expected, multiple meeting rooms, and a large parking lot for employees and clients, but if the new commute is too lengthy, the space is not manageable or welcoming, employees and clients may go elsewhere. Your company might not be able to function to its fullest capacity.

In addition, an inadequate office space location can come with its own financial downsides. If the office space is situated in an area that makes people feel unsafe, for instance, you could be forced to spend more on commercial insurance and security features.

2. Look for a Space That’s Future Proof

Techopedia defines future-proofed goods and services as things that are set up so well the first time that you don’t have to make changes to the system as time goes on. While nobody can predict the future, business owners can make educated guesses about where they see their companies in the next 5, 10, or 20 years. And this information is extremely important to your office search.

If you’re in the middle of a massive expansion phase, you’ll want to ensure that your office space will be able to grow with you throughout the term of your lease.

For most businesses, moving from office space to office space is extremely disruptive on a personal and a productivity level.

Any new office space should meet the short-term and medium-term needs of your business.

3. The Building Condition and Infrastructure

Similar to the location of your business, the condition of your building can also have consequences for your finances. Lack of amenities and the state of repair of the building can affect your bottom line. 

If the space needs to be refitted so that it has a particular internet capability, is unsafe,  or if your insurance company is concerned about the state of the infrastructure, you could be saddled with expenses that go well beyond the lease.

While this is an area where businesses may have to compromise, it’s important to know what you’re signing up for.

Are the necessary changes going to be expensive? Does the appearance of this office building negatively affect the company’s image? These are questions that are worth pondering as you assess the different office spaces you visit.

4. The Little Comforts

Little quirks in your new space that may seem like a nonissue at signing can augment over time, and leaving a multi-year lease often requires subleasing the space. 

To that end, you have to make sure that the flaws in your proposed office space are ones that you’re prepared to live with for the foreseeable future.

If the color of the wall isn’t quite to your liking, you can probably fix that with a new coat or some strategically placed art. But if you’re a retailer who sees a lot of foot traffic, a quirky front door or a slightly unintuitive entrance could put a damper on your ability to do business.

And when these little issues and minor inconveniences add up, they have a way of really blowing up. As such, you’ll want to get the nitpicking out of your system before you sign the lease.

What Types of Office Spaces Are Generally Available?

Office spaces are generally broken down into three general classes (see The Balance):

  • Class A
  • Class B
  • Class C

We’re going to discuss each of these categories one by one. 

1. Class A Office Spaces

Class A space is premium space. 

These buildings are known for having high ceilings, updated HVAC, and world-class property management teams. Chances are that the building itself will be fairly new and characterized by excellent architecture, engineering, and amenities.

However, Class A rental rates are often high. Due to the required financials for leasing this type of space, many businesses will not be able to rentClass A office spaces.

2. Class B Properties

Class B, while not as prominent as a high-rise, still delivers a workable and nice option. You might not have the premium service or the jaw-dropping architecture associated with Class A spaces, but you will still get some services alongside a manageable building location. The building may be fantastic but located in suburbia.

As a general rule of thumb, Class B office buildings are often older than their Class A counterparts. As such, you may find yourself dealing with the usual concerns that come from doing business in an aging building.

3. Class C Properties

Class C is often functional and often not in a fancy part of town. 

Class C properties are typically the most affordable. However, the key with Class C properties is that you need to understand why the rent is more affordable. Is this an excellent building that just happens to be further away from downtown? Or is the building aging to the point of needing major repairs?

In addition to this basic property class distinction, you can break things down even further in terms of open and traditional office layouts. But with these basic categories in mind, you’ll have a much easier time finding a building that makes sense for your business and your budget.

How to Negotiate a Lease Agreement

You’ve done your research and you’ve found an office space that everyone can be happy with. You want to sign the lease but you also want to make sure that the interests of your company have been represented.

Here’s how you can negotiate your lease like a pro:

1. Get a Feel for Your Future Landlord

Most landlords won’t lead with the red flags. Often your broker will have dealt with a particular landlord on numerous occasions and will have insight into their processes. Other areas of investigation might be

  • Does the common area look clean and well-maintained?
  • Are the amenities in working order?
  • Does this property management company have a solid reputation?

In the long run, you’ll be glad that you took the time to do this assessment.

2. Read the Fine Print

The terms and conditions that are listed in the lease will be what you are legally bound to. Your attorney can help you with the legal terms and your broker can guide you through the business terms.

Can you upgrade your office area without consulting the landlord? If a window gets broken or a door needs fixing, who’s responsible for the upgrades?

These complicated clauses can have a profound impact on your day-to-day operations and your insurance needs. You can never review these materials enough. 

3. Consider Your Leverage

Your bargaining position is relatively low considering the size of your lease compared to the landlord’s portfolio, but your broker knows what your landlord will typically give and what the market rate is for similar offices in the area.  Generally, the longer term and larger space you commit to, the better your negotiating power.

Questions You Should Ask Before Signing a Lease Agreement

Alright. You’ve read the fine print and everything seems to be in order. Is there anything else you need to do?

If you want to dot your i’s and cross your t’s, here are a few questions worth asking:

1. What Type of Lease Am I Signing?

Many people don’t realize right away that there are multiple types of commercial lease agreements, each of which determines the rent you pay differently.. Depending on the terms of your lease, you might be paying:

  • A gross rent or modified gross rent lease
  • A net, double net, or triple net lease
  • A percentage rent lease

Each type of lease will cover varying amounts of base rent, maintenance, insurance, and property management-related expenses. 

2. Can I Make Changes to the Space?

Any changes you’d like to make to the space should be addressed upfront and baked into the letter of intent with the landlord. Some landlords will oversee construction, give a tenant improvement allowance or give their consent within the lease agreement. 

If you can see yourself making any changes, you’ll want to discuss that with your landlord before you sign the lease.

“Is There Office Space to Rent Near Me?” Isn’t the Only Question You Should Be Asking

For many businesses, the search for office space is full of uncertainty.

“How much will we have to pay for this?”

“Will we ever find office space to rent?”

“Is there office space to rent near me?”

There’s always office space to rent. But finding suitable office space isn’t always so simple and in the Austin market today, you have to move quickly once you find that space. We get it.

That’s why we specialize in offering commercial tenant services that are designed to get you into your dream office in less time than you think. We can assist with landlord negotiations. And our services come at no additional cost to you.

What are you waiting for? Find the office space you’re looking for now.

Performance Windows Signs Lease at Centre Creek Plaza in Austin, Texas

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AUSTIN, TX — Austin Office Space, Inc. is pleased to have assisted Performance Windows with their recent expansion into Central Texas with a newly signed office lease at Centre Creek Plaza in Austin, Texas.  Performance Windows, who has multiple offices throughout the U.S., including Utah, Arizona and Idaho, has built its reputation by using the highest-quality windows, master installers with expertise honed over many years experience. The Austin office will help Performance Windows expand their sales team and management offices in the greater Austin area. 

Matt Watson of Austin Office Space represented Performance Windows with their Austin expansion. 

About Austin Office Space (AOS)

Founded in 1999, AOS is Austin’s largest commercial real estate firm to exclusively represent tenants and buyers. To date, AOS has served thousands of corporate tenant representation clients in the Austin market. AOS provides tenant and buyer representation for office, industrial and retail properties and subleasing services. For more information, visit: www.austinofficespace.com.

Press Contacts

For media inquiries or questions, please contact:

Velissa Jewell

Chief Operating Officer

velissa@austinofficespace.com

512.750.0851

 

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5 Benefits of Using an Austin Coworking Space

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Are you looking for a way to increase your productivity? Do you want the feel of an authentic in-office experience, even if your business is small or a one-man/one-woman show? If so, then you need to learn all that you can about finding an Austin coworking space.

Coworking spaces can be beneficial for many reasons. There’s the potential to network, grow meaningful relationships with others, and even increase your passion and productivity. Who wouldn’t want those results?

See below for an in-depth guide on the many benefits of using a coworking space in Austin.

1. Immense Networking Opportunities

The best client you could ever have is the one you’ve yet to meet. There are so many industries out there that need your services, the trick is finding different ways of reaching them. 

Many people use the standard approach; they attend networking events, go to sales expositions, attend every tradeshow in the Austin area hoping to generate sales. Here’s the problem: all the people at those events are looking for the same thing. It’s nearly impossible to sell something to someone that’s focused on selling their product.

It’s time to turn that thinking on its head; how can you build natural, organic business relationships with like-minded entrepreneurs? Finding an Austin coworking space is a great way to start.

Coworking spaces are filled with many different entrepreneurs in the same stage of business as you are! They want to build connections and have an in-office experience, but don’t have the income or resources to do it themselves. They need services like yours to drive their company forward. 

By sharing the same space, you’ll find it easy to kickstart meaningful conversations. Collaborations will come with all sorts of people and businesses you would’ve never crossed paths with otherwise.

It all starts by finding the right coworking space in Austin. We can help you find a space now and start growing your network today.

2. Boost Your Confidence

At first, you might roll your eyes at this statement; how can renting a coworking space boost your confidence? We know, but hear us out!

One of the biggest struggles that every business owner or entrepreneur faces is the infamous “Imposter Syndrome.” Essentially, this means that you start to doubt your capabilities and the way that others perceive you, your business, etc.

Every businessman and businesswoman has experienced this; even the most successful entrepreneurs experience imposter syndrome in their day-to-day. It’s totally normal!

This imposter syndrome is magnified when we isolate ourselves, which is a common practice when people are just starting a business. To cut costs, they lock themselves away at their house or sit at a coffee shop with their headphones in.

Humans were meant to connect; we were meant to be surrounded by others! By renting out space in a coworking space, you can give yourself the confidence you need. Every day, you’ll be talking about business with different entrepreneurs, which will scare off the imposter syndrome inside you. You are an expert, and your space can reflect that!

3. Balance Your Work Life

These days, it’s all the rage to work from home. People love the freedom of getting to start their own business from the comfy confines of home. 

It certainly has its perks, but some consequences come with performing too much business from home. People are finding it hard to disconnect; they’re finding it hard to establish a firm line between work time and family time.

Having a coworking space can help you regain work-life balance. You’ll have a distinct location for work, then be able to turn it off when you go home for the night. 

Perhaps the biggest benefit you’ll receive is having more intention for your family. You’ll put the phone down when you walk in the door, knowing you had a great day of work at your coworking space.

4. Budget-Friendly Business Solutions

Some of you might be saying, “I’d love my own office space, but I don’t have the money in my business budget to make it happen.” That just isn’t the case anymore.

Most startups can’t justify leasing out an office space for more than 1 to 3 people, which is the average size of a startup business. Coworking Austin spaces can give you the solution that you need at a budget-friendly rate.

You can gain access to amenities like a front-desk receptionist, a cleaning crew, internet connectivity, and even breakroom amenities for the price of one space. How great is that?

5. More Productivity

We all could use a bit more productivity throughout the workday. Instead of getting caught up in the drudgery of working from home each day, surround yourself with the buzz of an active office.

Renting a coworking space will inspire you to be more productive. You’ll be more intentional with your time, as well as enjoy all the amenities that can help your business flourish. Even being able to print something at a moment’s notice will enhance your business.

Each coworking space is designed to help you be more productive in the office. Nothing is out of reach!

Invest in an Austin Coworking Space to Receive These Benefits

Now that you have seen an in-depth guide on the benefits of using an Austin coworking space, be sure to use this information to your advantage.

Take the time to read this article for more information on how to find the best coworking space in Austin for your business. We often connect small businesses with great coworking options.To get started, you can call us at 512-349-0003 and we will be happy to assist you further.

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6 Questions to Ask Before Choosing an Office Warehouse for Rent

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Before you start looking for an office warehouse for rent, there are some questions you need to consider.

If your business is going to be as successful as possible, then you need to have the right space to call home. With a countless warehouse, industrial, and office spaces available in the Austin area, you need to be able to separate great candidates from not-so-great ones. 

The best way to do that is by asking yourself a few questions. In this post, we’re going to tell you what those important questions are and let you decide for yourself which office-warehouse space you should rent. 

Choosing a new home for your business can feel like a daunting task, but keep reading and you’ll be able to narrow it down to a few of the best candidates.

1. How Much Space Do I Need Now?

One of the most important things you’ll need to think about is space. How much space do you need to hold all of your employees, equipment, stock, and other machinery?

Do you have an office area and a warehouse? The space should be laid out in a way that makes sense for your business to move in and start operating. If renovations are necessary, the building’s landlord may give you a tenant improvement allowance for renovations if you sign a long enough lease.

Really consider how your business will use the space. Learning that your space is  just not big enough is tough in the first year or two of your lease. You have to think about how much space you need now and in the future.

2. What Does the Future Hold?

When looking to find the best office space for rent, you need to consider your growth plans for the upcoming years. When companies start to take off, it can be difficult to predict how things will shape up far into the future. The problem is, you’re going to sign a lease for 3-5 years, so you need to look far ahead.

Choosing a space based on what you may need in a year or two years isn’t good enough. You may end up outgrowing this office space and having to move again before the lease is up. Always err on the side of larger, if you can afford it, or negotiate a right of first refusal on an adjoining space to hedge your bets on your growing company.

3. Can I Afford the Rent?

How much space you need to house your business will determine the type of building you’ll look for – but so will your budget. Spend some time coming up with a feasible monthly rental budget that makes sense for the type of building you want.

Once you have a number in mind, you can bring it to your tenant broker and have them seek out office warehouses in that range. Having a tenant broker is an indispensable tool in finding the best office properties for rent in your area. 

At Austin Office Space, we complete a custom search to find all of the options that fit within your criteria. We’ll help you go through the best options and give you professional advice on how to choose an office warehouse for rent.

4. Does the Location Work?

Location matters for several reasons, the most important being with regards to your employees. If you end up renting a warehouse space far away from your previous location, then you could be dealing with disgruntled workers.

Some employees could threaten to quit if they have to commute much farther. It can be helpful to survey employees to get an understanding of their willingness to commute to a different location. Regardless, you should give them lots of notice when you decide on a rental property, so they can plan accordingly.

Depending on what kind of business you run, the location might be important for business reasons. If you need to capitalize on foot traffic for your clothing shop and warehouse, then you’ll want to be in a trendier area. Companies that frequently entertain clients may need to be close to hotels and restaurants.

This is another reason to work with a tenant broker. They understand where the best properties are, as well as the pros and cons of each location.

5. Are There Hidden Costs?

Hidden costs can come in many forms and stand to mess with your monthly budget. One of the important things to consider when you’re touring potential rental warehouses is whether or not the place can currently handle your IT needs. 

Some companies require a server room and the infrastructure to support hundreds of computers working at once. If the building isn’t wired the right way,  you’ll be in for a huge up-front payment that you may not have considered.

To avoid this, have your office mapped out before you look at new buildings. Then, you can compare your outline with what each building has in place and let that guide your decision.

Budget for things like moving expenses, property insurance, and monthly utilities as well. These things can sneak up on you to create a potentially unsustainable situation.

6. What are the Landlord’s Expectations?

Find out as much as you can about the landlord you’re getting involved with. What are they going to bring to the table once you’re all moved in?

By reading the lease, you can find out what’s actually included in the rental agreement. Utilities, for instance, is a great place to start. Are you covering all of the utilities every month or are some of them included in the monthly rent?

Who will handle the repairs? The HVAC? Janitorial? 

Your tenant representative will likely have insight into the various landlords and their property management companies. If your broker doesn’t have first-hand knowledge, see if you can get in touch with the previous tenants of the building, you may be able to glean some of this information. You might also be able to get more info about the quality of the landlord in general. Going into business with a bad landlord can create a lot of problems for small businesses.

Who Can Help You Find the Best Office Warehouse for Rent in Austin?

If you’re looking for an office warehouse for rent in the Austin area, then working with us at Austin Office Space will provide you with every opportunity to vet these questions and more with an experienced broker. As a broker that exclusively represents tenants, we’ve got the relationships and the experience to find you an office warehouse that your business can call home for years to come.

Visit our site to learn more about what we do and contact us to begin your search for your new office warehouse building.

office building for rent

Choosing an Office Building for Rent: 7 Key Factors You Need to Consider

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Are you a small business looking to rent an office building?

Choosing an office building for rent to house your business is a huge decision. There’s so much you have to consider, from the way the building is laid out to the way your business could grow in the future.

Getting it right will mean your business can function comfortably day-to-day and grow at a steady pace. Getting it wrong will mean that you’re sacrificing productivity and your near future won’t be certain.

In this post, we’re going to help you out by giving you the 8key factors that you’ll need to consider when choosing an office building rental. If you’re feeling overwhelmed, read this and give yourself a roadmap for finding the perfect office building. Then call an experienced broker such as Austin Office Space to help you sort through the many details.

1. Location for Employees

Finding a building that isn’t too far away from where you currently operate is generally a good idea. You don’t want to suddenly create commuting issues for your staff. If they’re used to taking the bus for 30 minutes, then you move offices and the commute is 90 minutes, retention will be strained.

Of course, do your best to be accommodating, but you have to strike a balance between your company’s needs and what’s good for each individual. The best thing to do is to keep your employees in the know as soon as possible when you decide on a location. This way they’ll have time to sort things out.

Austin Office Space can help you put together a heat map of current employees’ locations and can help you sort through the best location for your particular needs.

2. Rental Price and Budget

Decide how much rent you can afford and compare that with the prices of some of the buildings in your area. This is where working with a tenant broker can really help you, as they’ll have access to the available market and can help you negotiate for the best rent and costs. 

It’s hard to estimate rent prices without a strong understanding of how much space you’ll actually need. Try to map out your new office layout as best you can to give yourself an idea, then communicate these needs with your tenant broker.

A company like AOS will analyze your needs, not just now, but in the long term as well. With this information and your budget, we can find you the best office space in the area.

3. Size and Layout

Size and layout will depend heavily on what kind of business you run and what your plans for the future are. The amount of space per employee varies greatly from business to business and we can help you estimate for your current and future employee base.

Break it all down by room and think a lot about what employees will be in what spaces. You also need to factor in meeting rooms and common spaces where you can hold meetings and have clients visit.

We’ve mentioned it already, but looking at your growth projections for the next few years can help you get a sense of how much extra space you need to account for. If you want to avoid moving your business again in 5 years, then it’s a very important aspect of getting the best office building for rent.

4. Looking at Lease Term

You’ll also want to consider how long you plan on spending in this building. A typical lease term for an entire office building would be 3-5 years but could be more or less depending on what you’re looking at.

If you’re in the early stages of your business, you may not be very certain about the future. Getting locked into a 5-year lease isn’t a great option for this type of business. However, for a more established company, this is often a very reasonable term and can help lock in today’s market prices.

5. Availability

Renting an office building is nothing like renting an apartment or even a unit in a building. It’s going to take longer than you think, so it’s best to start the search many months before you actually need to move in.

Of course, this depends on your own needs, but it has a lot to do with vacancy rates and the market in the neighborhoods you’re looking at. Working with a tenant broker can give you the best chance to find a building quickly, but still budget anywhere from 6-12 months to find the ideal rental.

6. Condition of the Building

When you’re touring different office buildings, make note of each one’s infrastructure. How set up is it for your business to move in and start working?

You’ll need an internet connection, phone service, and the right amount of power to house your equipment. Many rental buildings will have utilities accounted for already, but if it’s not, that’s an extra expense and a lot of extra work to consider.

7. Does It Suit Your Style?

The style probably won’t be the first thing you prioritize for your office rental, but it’s important for some. If the building doesn’t fit with the aesthetic qualities you need your business to possess, then it’s not worth renting it for the next few years.

At the end of the day, branding is one very important aspect of running a business. To build a great brand, everything has to be in lock-step and that includes your building. 

If you’re able to make adjustments to the office building, like painting and art installations, then it could be a good option. Not every office building owner will be up for it, so if it’s part of your plans, then you’ll need to ask about it.

8. Work With an Expert to Find an Office Building for Rent

If you’re thinking about how to rent an office building for your business, these are some of the important things to consider. What they all point to in the end, however, is that it’s best to work with a tenant broker if you want to find the right building.

If you’re looking for an Austin office building for rent,  contact us at Austin Office Space. We’re one of the top exclusively tenant brokers in the city, so visit our website to learn more about us and how we can help you find a home for your business.