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Office Lease And The Financial Components

Before signing the documents on your next Chicago office lease, there are quite a few financial components you must consider. Since you want to be able to properly afford your annual office lease and also know just what you as an office tenant will be responsible for paying, it is important to ask questions prior to signing the lease. Some of the financial components as they pertain to office leases are listed below to help you in the quest for the most efficient office leasing experience.

Occupancy Costs

Before you sign a commercial office space lease, you should thoroughly evaluate occupancy costs. Check to see if the base rental payments will be fixed or escalated. In addition to the base rental payments which you are required to pay, there will also be other costs as well. Some of the additional costs which you as a commercial tenant will experience throughout the lease term include utilities, parking fees, janitorial fees, buildout costs and more. The lease may also include various rent provisions such as those associated with increased operating expenses. It is important to note that each and every commercial lease will differ as to what the landlord is responsible for paying and what the tenant must pay for on their own. Some
office space leases will be quite favorable towards the tenant as the landlord may pay for utilities, janitor expenses and more. Always read the lease carefully and have your tenant representative inquire with the landlord as to all of the inclusions within the commercial lease.

Determine Which Office Lease Is Most Beneficial To You

If you have a few different options available to you when it comes to office space leases, you want to pick the choice which is most beneficial to you as an office space tenant. In the end, you want to look at the net present value, which is the total cost which the tenant will be paying. Tax factors should be kept in mind as well. It is also important to evaluate the rentable square footage as well as the usable square footage. By comparing the various costs of the office space lease options and the individual features of each one as well, you will be more likely to choose not only the most attractive option but also the best in terms of financial aspects.

Keep Financial Considerations at the Forefront of the Lease Decision

It is easy to get off track when considering the many commercial office space lease options and not put financial aspects at the forefront of the decision-making process. However, as a business owner, you have to ensure that you not only choose the right office space to accommodate your business but that you will also be able to pay for all of the associated costs. When reviewing various lease choices, make sure you know what the landlord is responsible for paying and what the tenant costs will be, in addition to the basic costs, such as rent. Doing so will allow you to make the right financial decision for your business.

Commercial Real Estate

by Tom Koelzer with No Comment Uncategorized

Business owners who wish to lease commercial real estate have plenty of choices these days. Since not all business owners require the same type of commercial real estate, it is good to know that there are various options available. Some individuals who own businesses do so in the retail industry whereas others work in a light industrial setting. Whichever industry one is hoping to find a new office home within, there is sure to be quite a few choices, especially in downtown Chicago and the surrounding suburbs. The following will highlight some types of commercial real estate and detail what things prospective commercial tenants should look for in a commercial real estate setting.

Office Space

Professional office space is high in demand in the Chicago area. Appraisers, insurance agents, attorneys, medical professionals and those in many other industries need professional office space to operate their business out of on a daily basis. Some office space for Chicago professionals consists of a single office whereas others may be a few floors in a large office building. When choosing the right professional office space setting, business owners must consider location, square footage, office amenities, parking and more. Before settling on a specific office for your company, make sure that your desired inclusions are a part of the decision-making process.

Industrial Real Estate

For those who work in a more industrial field, industrial real estate space is necessary for day-to-day business operations. As with professional office space, the Chicago area also holds many options for industrial business owners. When considering industrial real estate locations, one must look at the surrounding neighbors to ensure that it is industry-friendly, in addition to checking on local zoning regulations to ensure that industrial operations are allowed. The landlord of the prospective commercial real estate will be able to answer these questions for you. You should also make sure that the industrial real estate location you select will properly accommodate the size of your business and be feasible for all of your work operations.

Retail Space

Retail shops are in abundance in Chicago and the surrounding suburbs and do a great deal of business, no matter what the retail operations may be. If your retail store is looking for a new home in Chicago, you will find plenty of retail lease options in most areas throughout the city and on the outskirts as well. Some features which you should look into prior to leasing a particular retail space include square footage, amenities, parking options, layout, delivery entrances and more. Taking a closer look at the current retail space neighbors will also help you to determine whether or not a particular spot will be the most lucrative one for your business.

There are so many different commercial leasing options available to business owners in Chicago and the Chicago suburbs. No matter whether your business is professional, industrial or retail, there is a future commercial home for you in the Chicago area. The best way to ensure that your leasing choice is the right one is to have a tenant representative by your side every point in the search.

Chicago Suburban Markets Perfect For Office Space Tenants

by Tom Koelzer with No Comment Uncategorized

When business owners start the search for new commercial office space, they may not want to choose a location within a big city. In other words, suburban markets are more ideal for one or more reasons. This is true with business owners in the Chicago area. Although the city is a great place to live and enjoy the attractions, working within the city is not the right answer for all business owners. Fortunately, there are plenty of Chicago suburban markets which hold so many wonderful opportunities for Chicago-area business owners.

O’Hare Office Market

The O’Hare suburb of Chicago is a beneficial locale to lease office space if you are searching for a suburban Chicago market. Close to O’Hare International Airport, the convenience of the area for business travelers can easily be seen. Even if your employees don’t travel that much and your company doesn’t see many clients coming in from out of town, the O’Hare suburban market is still a great place to lease your next office. It is close to many area interstates, which makes commuting easier for yourself and your employees. Also, there are plenty of other companies and industries in the area which will often allow new clients to find their way to your office if they are in the area for other reasons as well.

North Suburban Office Market

If you are a business owner eager to lease an office in the North suburban area of Chicago, you will find plentiful options. Towns such as Skokie, Evanston, Morton Grove, Wilmette and more are filled with commercial real estate leasing options. Situated close to Lake Michigan, these towns are not only perfect for commercial offices but they are quite scenic locations as well. This makes it easy to both live and work in the towns in the North suburban market area of Chicago.

East-West Corridor Office Market (Oak Brook/Naperville)

The East-West Corridor area of Chicago also holds a lot for business owners in the way of ideal commercial real estate. Two towns in particular which are fantastic spots to lease commercial office space include Oak Brook and Naperville. Oak Brook is located about 20 miles west of the city and is a perfect suburban location for business owners seeking office space for rent outside of Chicago. Those who lease an office in Oak Brook will find they have plenty of well-known neighbors including Ace Hardware, Papermate and the McDonald’s Corporation, to name a few.

As for Naperville, this town is located a bit further west of Oak Brook, being located 30 miles outside of the city. Naperville has plenty of commercial leasing options, both large and small, for business owners to take advantage of. Lucent Technologies, Kraft Foods and ConAgra Foods are some of the big names in business which you could have as your neighbor if you lease a Naperville office. Naperville is also a nice place to lease office space as you will find plenty of amenities close by, which can be beneficial for both you and your employees.

Northwest Office Market (Schaumburg)

The Northwest region outside of Chicago has plenty of commercial leasing options, including within the town of Schaumburg. Schaumburg is home to two large corporations, IKEA and Motorola. It is also an area filled with many different shops and restaurants as well as plentiful professional offices. Those who lease an office in Schaumburg will love the convenience of having Chicago not too far away but appreciate not having to deal with the traffic and congestion which the big city holds. Schaumburg offers small professional business settings as well as office space for large corporations to lease.

If you are eager to lease office space in the Chicago suburban market, then looking further into the options above is an excellent place to start your commercial office space search.

How Much Office Space Do I Need?

by Tom Koelzer Uncategorized

Searching for commercial offices for lease is a time consuming task for many. For those who have gone through this procedure before, it may not be as tedious. However, if you are new to the office space leasing routine, you may be overwhelmed with how many things you need to do to get the perfect office space. Although deciding on the location is a prime consideration, you must also seriously consider how much space you will need for your next office lease. In order to determine the right amount of office space, the following will help.

Type of Business

The industry in which your business lies will often tell a lot about how much space you require when you lease office space. Certain businesses need a specific minimum amount of space in order to operate properly. The industry standards are ones you can look to in order to determine how much office space is necessary in your case.

Number of Employees

Another consideration to keep in mind when figuring out how much office space you will need is to factor in the number of employees. As you might imagine, if you are a small company with few employees, you may not need too large an office space. On the other hand, if your company employs hundreds of individuals, the office space amount will be greater.

Office Equipment

Also consider the office equipment which your business uses. Many business owners forget about accommodating their large office equipment such as printers, fax machines and more. You want to have ample space for all of your office equipment and not have to find spots to fit it in at the last minute.

Private Offices or Shared Office Space

Whether you want private offices or shared office space will also help you to figure out how much office space you need. You should also determine if you want all of the private offices to be similar sizes or if some of the corporate officers or company heads will get larger offices and then have smaller offices reserved for other employees. Shared office space may help you to limit the overall amount of office space that you need, especially if you share amenities with others in the corporate office building. For example, if you share a reception area and a conference room with other companies in the general office building, this may limit the amount of space you need for your individual office space lease.

Calculating the right amount of office space is essential in order to acquire the best possible office. Not only will choosing the perfect amount of space for your leased office premises accommodate your company in the best manner but it will also save you money in the long run. You don’t want to lease more office space than you need. Doing so can cost quite a bit of money, money which your company simply can’t stand to lose. Determining the right amount of office space will ensure that you get the office your company needs for the price it can afford.

Office Space Lease Negotiations

by Tom Koelzer Uncategorized

Office Space for Rent

7 Key Points To Negotiating Your Office Lease

1. Be Ready, Willing and Able to Walk Away

The biggest mistake many tenants make is not developing legitimate alternatives to their first choice, whether a new space or a lease renewal. If a landlord believes you’re not willing to switch to a different property, you lose your negotiating leverage.

2. Start the Process Early

Time should be your ally, not your enemy during negotiations. Landlords know that the managers of other buildings can take six to eight months to create a space plan, get construction pricing, agree on a rental rate, prepare a lease document and ready the space for occupancy. If you wait too long before asking for a renewal proposal, you’re telling the landlord that you’re not considering any other options.

3. Know the Whole Picture Before You Start Negotiations

Is the building being sold? Is the largest tenant moving out? How much free rent did the last tenant get? Does the building have HVAC or parking problems? What is the landlord’s financial situation? Candid, complete answers may not be forthcoming from the landlord or his broker. Expert research can make sure that what you don’t know won’t hurt you.

4. Make Landlords Compete For Your Business

The key to a successful negotiation is creating competition between your current landlord and other landlords in the area. You should have an experienced advisor providing the proper market research, lease comparables and the negotiating skill to use that information to create leverage for you.

5. It’s In Your Best Interest To Have A Representative Negotiate For You

Unless you’re a real estate professional, it’s not a good idea to negotiate a lease deal directly with the landlord’s broker. An experienced tenant representative will help ensure that you receive the best possible rates, terms, incentives and lease clause protections. Remember, the landlord’s representative negotiates leases every day; you may do it once every 3 to 4 years!

6. Hiring A Tenant’s Representative Doesn’t Cost You More Money, But It Can Save You Money

Occasionally a landlord will “try to save you some money” by discouraging you from engaging a tenant representative. Don’t be fooled. He’s not doing this out of the goodness of his heart. He knows that without a tenant representative you’re more likely to be in the dark about market rates and terms, and less likely to shop the market, or consider other alternatives. The at means more money in the landlords pocket.

7. Make Sure You Are Comparing Apples To Apples

Business owners who are not experienced with commercial real estate often find it difficult to perform a true “apples to apples” comparison of different facility choices. Lease terms such as full service gross, modified gross, triple net, tenant improvement allowances, rental abatement, escalations, base years, operating expense stops and loss and load factors can obscure the true amount you’re paying and make legitimate comparisons difficult. A good tenant representative will sort through all this for you.

Tenant Advisors

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