Common Tenancy Myths – And The Things You Should Look For Instead
You may be currently hunting down the cheapest office out there with the determination of a detective. But securing your perfect brand base isn’t all about finding the lowest-priced lease, nor is it about a lot of things you may have thought. Here’s our list of commercial real estate myths – and the alternative checklist you should pocket instead.
MYTH 1: Getting cheap rent is my first priority
This is the first myth, because it’s the most deeply ingrained. When searching for somewhere to live, price is usually the first criteria. But while you can handle a cheap but small apartment, a cramped office can really affect your business – causing your best employees to look elsewhere and your best clients to follow suit. That’s why leasing a dark cube of an office for $200 per month cheaper than a purpose-fitted one filled with natural light may not be a saving of $200 after all.
Takeaway tip: Focus first on finding the right office for your business. Then look at the total occupancy cost over the entire lease term – including IT, cleaning, admin and furniture. You will find the total occupancy cost that works in your favour, in addition to providing non-tangible benefits such as maintaining healthy staff and a great brand profile.
MYTH 2: I’ll need to customise the space
Try not to go into an office viewing with one eye on what’s there and one eye on what will be once you move in. Why? Because unless you’re a niche organisation, chances are that a bit of perseverance could net you a perfectly pre-configured space for your needs. And think how much that would save you – maybe enough to justify moving into a swish office you would’ve otherwise disregarded as too expensive.
Takeaway tip: There are many similarities in how tenants in the same line of business use their offices. Start looking at spaces being vacated by people doing what you do – and you may not have to do very much at all.
MYTH 3: One contract fits all
The “standard lease” is the ghost of commercial leasing – you may think you see one, but upon closer inspection, it’s not really there. Most of the residential renting laws don’t apply to commercial leases – besides which, there are many more things to take into consideration than whether your couch will fit in the corner. Commercial leases are hugely customisable. Suggest customising yours to both your and your landlord’s advantage (ie a small period of free rent at the end of a successful long-term lease) and you may just get a “yes”.
Takeaway tip: Instead of looking for the perfect lease, look for a great landlord. A reasonable person who is willing to come to a deal that suits both of you is far better than a piece of paper that reads well fresh out of the mail.
MYTH 4: I’ll get a better deal if I don’t pay an agent’s commission
Leasing an office is nothing like buying a car at a car yard. It’s a complicated process with many shades of grey – and the potential for them to run into the red if you make a big mistake. Besides which, the language seen on your lease and used in negotiations isn’t found in the Oxford Dictionary. Best to get the help of someone who speaks the language.
Takeaway tip: While it’s true that agents only get their fee after you sign, if you break that lease it will reflect as badly on them as it does on you. Rest assured, your agent will put the time into finding you the right place.
MYTH 5: I can find my own office space
Yes, you can probably find something on TradeMe – and line up down the hallway to see it along with 20 others, references clutched in hand. Truth is, office spaces in desirable buildings and locations fill up fast, with many of the best spaces getting shown and leased long before they ever make it online. Getting in via a registered agent not only gives you the pick of the crop, it’s a lot less stressful. If you don’t have someone working for you who is specialised in getting you through newly vacated doors, you may find yourself walking through a tired old one. Every day for the next ten years.
Takeaway tip: Think about appointing an agent who represents your best interests, so they can do the hard work searching the market and present options back to you. Find the right commercial leasing expert for you at Bayleys – and let that person get onto finding you your perfect office space.