There are many different reasons why a company may think about relocating rather than renewing their office space lease. The commercial real estate market is constantly changing, and although some changes do not warrant the cost and effort of relocation, others do. Whether a move may be warranted due to building concerns, the local market, or even company growth, there are some significant signs that indicate it may be time to contact a commercial real estate broker and begin the search for new space.
When the Space No Longer Fits
When a company outgrows its space, or there are other concerns related to that specific space that hinder productivity, finding a new building may be the answer. Following are some issues to look for:
- Wireless Connectivity Problems - Considering the fact that it is practically impossible today to conduct business without the Internet, wireless connectivity is a prime necessity for almost any company. When there are connectivity issues that affect wireless service, such as dead spots within the building, or other compatibility issues that cannot be remedied, moving may be worthwhile to keep up with productivity.
- Too Little, or Too Much Space - The need to downsize because of cutbacks or in order to save money is an obvious reason to look for commercial real estate brokers who can search for new office space to keep operational costs down. Forcing employees to continue to work in smaller spaces, when there is growth happening all around them, has its own share of problems. Either of these situations is indicative that a move may be necessary in the very near future.
- Inflexible Workspace - In many cases, one option that can be considered to avoid relocation is redesigning the interior of a workspace so it is more usable for a company that has experienced significant changes since initially leasing that space. When the space is inflexible, and making these kind of necessary changes is impossible, it may require relocating to a space that is more functional.
When the Location No Longer Fits
Growth and changes within a building itself are not the only reasons why a company may need to look into relocation. Sometimes other things, such as the location of the building or the local commercial real estate market, might suggest that a change of scenery may be warranted. Following are some of these things to consider:
- Physical Location - The wrong physical location can make commuting a challenge for employees. Current trends in population growth and commercial real estate indicate that people and businesses alike are moving back toward the cities and the availability of public transportation. Companies located in the suburbs may find themselves rethinking their location in order to attract the right employees who are looking for positions in urban areas.
- Over-Market Rent - Another concern that many companies face is paying too much for rent after the yearly rent increases. Some companies are paying more for a space they have continued to occupy than a brand new tenant would pay for that exact same space. When rent is higher than the going market rate for a similar space, a company may need to either renegotiate the terms of their lease or consider leaving if this is not possible.
Successful commercial real estate lease negotiation that allows a company to remain in a good location is the goal of every business. Unfortunately, changes often demand relocation. The topics discussed above suggest some of the main indications that it is time for a company to contact a commercial real estate broker to start looking at what other options are available to them!