Moving a business seems daunting when the new space has not yet been found. The project looms like an ominous black cloud, yet difficult to define let alone tackle.
But once the new space is identified, the project becomes clearer – more like piecing together a puzzle with the borders marked out.
So with the new premises being so critical, what’s the best way to go about your property search? Whether leasing or purchasing, here are our suggestions for securing your next premises:
- Do your research – investigate the general market and specific area you are searching in to understand supply and demand, recent transactions and what is driving the market.
- Get the right people onboard – together with a project manager and designer, commercial real estate agents or buyer/tenancy advocates can be retained to conduct the search on your behalf. Ensure the terms are agreed upfront and establish whether a landlord finder’s fee is being paid to anyone and what this means.
- Time on your side – allow plenty of time for false starts, lagging decision making and changes of direction to ensure the search and negotiation phase is not time-pressured.
- Form a property brief – create a property brief to guide the search, before going to market. Include the obvious items such as size, location, asking rental, length of lease, parking and local facilities but don’t forget the frequently overlooked requirements such as client impressions, environmental rating, zoning approval, staff travel and access, warehouse height and special needs access.
- Spatial analysis – consider bringing forward the initial fitout planning so you can be confident on how much space is required and that extra square metres are not taken or forgotten. Plan for upcoming growth or known changes in the short to medium term.
- Go to market – view properties online and submissions from commercial agents. Setup site visits for the interesting properties, and when onsite create a checklist to help with comparisons and take photos to refresh your memory.
- Short-list the options – Short-list the best properties, ideally 2-3 standout options, and re-visit with all the decision makers. Form an understanding of fitout and relocation costs, construction and move timing and what the differences between each premises would mean to your company.
- Negotiate – Select your preferred option and negotiate the Heads of Agreement and lease (or purchase). The best strategy is to have a decent second and third option and to understand the other party’s motivation and levers. Further information on negotiating your property can be found online from BRM’s website.
- Due diligence – whether leasing or purchasing, it is wise to invest time and money evaluating the new premises. Request all plans and pay attention to the HVAC plant and equipment (air-conditioning), roof condition, carpet and ceiling, lighting, external and basement appearance, security, window seals and blinds, switchboards and amenities. Discrete inquiries to outgoing tenants is often revealing.
- Source legal advice – Heads of Agreement are binding and the lease is typically drafted by the landlord and weighted to that party. Ensure you have legal representation, allow time for the contract review process and avoid the trap of arguing out the semantics and minutia.