We’ve all seen the headlines about the need for office environments to adjust given the coronavirus pandemic and that building owners and managers are trying to adapt quickly. Many of us are likely still working from home.
When will we all return to our offices? What will those spaces look like? Will we still go to the office every day?
Business owners and executives across the country (and the globe, for that matter) continue to wrestle with these fundamental questions. It’s probably safe to assume that we’ve all been running a wide array of office scenarios through our heads for six months or longer.
Challenges stemming from the COVID-19 pandemic have accelerated a number of changes that were already taking place in how and where businesses work. This article is the second in a five-part series about the ongoing evolution of offices and what businesses can do to adapt and succeed. The uncertainty unleashed this year has been harrowing for many businesses, but there are opportunities to grow amidst all the disruption. The first part of the series focused on employee communication and now we turn our attention to office space.
Creating dynamic office spaces can spur innovation and creativity. You don’t have to sacrifice these benefits during the pandemic. In fact, adapting to new realities offers an opportunity to rethink your company’s work environment. Open and airy spaces, including larger conference rooms and teamwork areas, that allow groups to collaborate at safe distances can align with your company’s brand and values, as it did with my firm’s Richmond, VA, space. The key takeaway is that office spaces can still work in our COVID-dominated world.
As one of the most significant expenses that many businesses have, office rent is a prime target if you’re looking to cut costs. Even though many professionals have adjusted to working from home, office space still plays an important function. It’s difficult to replicate that environment remotely and for some businesses, that face-to-face interaction (even if distanced) is crucial. Plus, many employees are or will be itching for the opportunity to return to the office, if for no other reason than to be somewhere other than home.
If you’re considering new, more, or different office space, now is a good time to be decisive.
If leasing space, tenants are currently in a strong negotiating position. The first consideration is to assess how much office space you need. What’s the maximum amount? Think through how you use the space and what you really need.
If you’re trying to reduce your footprint or ensure your space is as efficient as possible, consider new work arrangements. The past six months have fundamentally changed how many companies think about their space and the ways in which their teams interact. For example, could you have certain employees in the office on certain days or particular areas of an office dedicated to specific teams? Perhaps not everyone needs their own permanent desk or office. Think about how your team works and what your long-term growth plans are. Similar to the previous article in this series, don’t forget to engage with your employees. Ask for their input. That perspective is vital and may yield ideas you haven’t considered.
Once you have a sense of how much space you need, get aggressive.
Many companies are breaking leases or not fulfilling their lease obligations. This scenario creates an opportunity to get a good deal.
If you like the building you’re in and/or your landlord, ask about swapping space for something larger or smaller. You can also request to add contiguous spaces to your current office. If you want to grow, but don’t want the hassle of moving, adding that contiguous space is an ideal option.
When talking with landlords or their representatives about space, remember that everything is negotiable. If you don’t want to move buildings or want to move to another building owned by the same landlord, ask for all tenant improvements (your build out and office customization) to be absorbed by the landlord. If you’re an existing tenant working with them, the landlord won’t incur any marketing costs or broker fees to execute the new lease agreement so they should cover those tenant improvements.
Another important component of a lease agreement is subletting the space. Be wary of leases that don’t allow you to sublet or require permission from the landlord or building owner before you can sublet. Having a sublet option is important for companies. As 2020 has demonstrated, we don’t know what the future holds and having a sublease clause gives you flexibility and options for the future.
If you’ve decided it’s best to move to a different building or new area, conduct extensive due diligence first. Don’t just rely on brokers to steer you to a specific location. Advice and insights from professional commercial brokers should certainly be a part of your decision calculus, but not the only information you use. Ask around to others, especially if you trust them and they’re not incented to give you a specific answer. Talk with your peer group about their experiences too. A potential benefit of this approach is that you could find another company that may need or want to give up their current space.
Regardless of where you find new space, there is one important piece of advice: Don’t negotiate against yourself. How do you ensure this happens? Be patient.
Especially in today’s office market, patience will pay off. Be aggressive with your offer and then sit back and wait.
A final option that a company may want to consider is purchasing office space, which essentially allows you to be your own landlord. With lower interest rates, this strategy might be more attractive than it’s been in the past. Although this scenario may seem appealing, there are a number of pitfalls and added responsibility when you own an office. It’s a commitment that shouldn’t be taken lightly.
Shrewd business owners and executives will recognize the current opportunities to rethink their office spaces during the pandemic. If you’re in a position to consider changing or growing your office, it’s truly an ideal time to strike. Decisive action now can help put your company in a stronger position through the remainder of the pandemic and beyond.Business & Finance Articles on Business 2 Community