Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
A key ingredient in building a healthy business is developing and implementing a detailed strategy for your office requirements.
While it takes a lot of time and energy to develop a successful office real estate strategy, leaders who do it right can save their company a significant amount of money and some major headaches down the road.
With over 55 years of combined experience in office leasing, our team has compiled a list of five things to consider when you are looking for new office space.
We hear it all the time: “There’s a year left on our office lease, so we aren’t ready to start thinking about our real estate plans yet.”
It is certainly possible to negotiate a new lease or renewal in a tight timeframe, but time is leverage when it comes to negotiating with landlords. The reality is that it is never too early to plan for your real estate future.
Keep a gauge on the market throughout the term of your lease, monitoring new availabilities, asking rates, and other trends in your submarket. This should be an ongoing discussion with your real estate adviser, so you can start the negotiation process early. Discussions with the landlord should begin 12 to 24 months before the expiration of your current lease.
Business owners often forget to factor the cost of moving into real estate transactions. These costs are often greater than expected, as much as $3 per square foot or more, depending on the circumstances.
Evaluate the furnishings in your current space. Can you logically reuse the furniture, phone systems, and other materials from your old space, or will you need to make room in your budget for some upgrades? It is important to note that occupiers who are more technology-dependent may face additional obstacles at this stage as servers and other hardware can pose unique challenges.
By the year 2025, an estimated 75percent of the U.S. labor force will be made up of millennials. This has caused many growing startups to confront the challenge of competing with larger, more established competitors in attracting and retaining millennial talent.
While there are several factors that contribute to a company’s ability to recruit quality employees, its location and office design is among the most important. The millennial generation prefers a more collaborative working environment and, as a result, we are seeing many companies shift to an open office layout.
Access to public transportation and proximity to urban housing also factor into attracting millennials, according to the latest research and insights into workforce trends. Ask your real estate advisers what top talent is looking for in their prospective workplace, and consider researching what your competitors are doing well.
The costs of designing, constructing, and demising office space can add up. As a result, many tenants are able to negotiate a tenant improvement (TI) allowance into a new lease with the Landlord. In order to get a ballpark estimate of these costs, it is important to have a plan for what type of layout best suits your business model ahead of time. Talk to an architect about mocking up a plan for your space, and the Landlord will bid the project out to several construction contractors to get a price.
This step, while meticulous, should not be taken lightly as construction costs and TI negotiations can vary widely based on term and square-footage. Landlords are typically more flexible with TI allowances in longer-term leases. For example, a three-year term might include new carpet and paint, while a five-year term may give you more allowance to move walls and reconfigure the lighting.
New companies may have a harder time projecting their future growth. Will you have more employees in five years? How much additional space would you need to accommodate those workers?
One way to prepare for this uncertainty is by negotiating an expansion option into your lease. The option will give your business first right of refusal on leasing additional space that becomes available during your lease, should you decide you need the room to grow.
It is also important to evaluate the efficiency of your floorplan. The trend of open workspaces is emerging. Companies are swapping out private offices and winding corridors for cubicles and common areas. This method is helping companies cut costs by reducing the average footprint needed per employee.
Your company’s real estate decision is a big one. Not only are you committing to a geographic location for your business operations, but you are making a long-term financial investment that cannot be overlooked.
Whether your lease is about to expire or you are looking to craft a long-term plan, consulting a commercial real estate adviser to walk you through the steps above is always a good decision.
Contact: Tom Dahl and Dan Wicker are commercial real estate advisors and brokers for
Cushman & Wakefield Northmarq. to******@********nm.com; 952.820.8771;
da********@********nm.com; 952.893.8254; www.cushmanwakefield.com.
