Things to consider when renewing or relocating

a commercial tenant representation firm • www.howardecker.com

things to consider when renewing or relocating


Technological and generational shifts are redefining every industry, and commercial real estate is no exception. Companies that thrive are embracing these changes and recognizing that office space is one

of the factors that help them develop their brand, values and culture. Companies are no longer looking at just square footage, but are incorporating things like employee retention, client experience, and yes, cost per square foot, into their leases.

DOES YOUR SPACE SUPPORT YOUR CULTURE & BRAND?

Your office space is more than just the building, carpets, or cubicles that comprise it. It is one of the main places

your employees work to build the trust of your clients, and a physical manifestation of your company’s culture.


DOES YOUR OFFICE LOCATION SUPPORT YOUR EMPLOYEES?

Your employees most likely work long hours. Outside of their home, they probably spend the most hours of their week in the office. For this reason, it is important to find an office location that is convenient for all

your employees—not just for the company’s owners and top executives. Convenience is about more than just commute times. If work-life balance is one of your company’s core values, then choose a location where the available amenities and services support this core value, such as fitness centers, restaurants, and daycare.


Some people mistakenly think that a growing rent bill is the sign of a growing company. We know from experience that many growing companies actually need less space and expense rather than more space.

Our suggestion is to actually shrink your office footprint per person. At the end of the day, you need to marry culture and cost to make sure the bottom line impact works for your business. Depending on your business, how you spend your workday is divided between various activities (i.e. doing research, collaborating with your peers/clients and socializing).

ARE YOU SPENDING TOO MUCH?

The traditional model of a private office/cube per employee may no longer be the most efficient and best way to organize your space.


The volatility of our current economy is not going away anytime soon. We believe that a well-designed lease hedges against these main risks.

To mitigate these risks in your new office lease, you must clearly understand your ability to increase or contract your space over the course of that lease.

ARE YOU AVOIDING RISK?

Building Risk: The risk that a change to the building’s ownership or infrastructure impacts your occupancy. For

example, can the technology capabilities of the building change over time or will they become obsolete? Is the new ownership not as “tenant friendly” or less interested in making upgrades to the building that will maintain it in a first class manner?

Market Risk: This is risk related to events in the global market place which trickle through to real estate and have an

impact on the rent tenants pay. Sources of market risk include recessions, political turmoil, changes in interest rates, natural disasters, or terrorist attacks.

Business Risk: The inherent risks within your own business that impact profitability. Will you lose a key client? Will new

technology make your product offering obsolete?


There is a new culture of egalitarianism and equality that has taken root in modern business. Gone are the days of “mahogany row,” where the offices of the corporate boss and senior executives out-shined and out-

sized the postage-stamp-size cubicles of staff. Many companies are ditching the office completely. Those keeping them have embraced a smaller, one-size standard office—often the same size as their small conference rooms—providing for more flexibility. This also allows companies to use space more efficiently.

ARE YOU FOLLOWING OLD ASSUMPTIONS + PARADIGMS?


Along with decisions about who to hire (the largest expense of a typical business), decisions about where to locate your office (usually the second largest expense) are high priorities for the forward-thinking business

owner, partner or entrepreneur. No, it is not rocket science, but it does require forethought, strategy, planning, and timely execution. That is why we always recommend finding an experienced commercial real estate broker who does not have the typical conflicts of interest commonly found in the industry. You can determine this by asking him or her if their company also represents the building landlord in this or other transactions.

WHAT IS THE MOST IMPORTANT THING TO CONSIDER?


• COMMUNICATION IS VITAL TO THE PROCESS Before a company begins their search for new office space, they need to have the general

“go- ahead” from the C-suite and have a team in place that will be handling the project.

• LOWEST RATES DON’T ALWAYS MEAN DOLLARS SAVED Over time, we have realized that the financial bottom line is most important in potential space

options. Most companies begin looking at the lowest rates available in the market; however, in the process, they realize that the spaces with the lowest rates don’t always reflect the intangibles (i.e. work/life balance) that ultimately affect their bottom line.

• SPACE & LOCATION MUST REFLECT YOUR PUBLIC BUSINESS IMAGE You must be aware of the business relationships and the public relationships your company has

to the community. Your office location choice should enhance those relationships.

• KEEP AN OPEN MIND The traditional way of looking at office space is changing. This is hard for certain companies to

accept. It is important to keep an open mind. Take advantage of the experience of moving and learn about what other successful companies are doing to attract and retain the best talent.

LESSONS LEARNED:


A successful business needs to connect the full worth of the company to its growth (past, present and future), its brand, its culture and its environment. We at Howard Ecker + Company focus our efforts and attention

on the needs of one client relationship at a time and offer non-traditional compensation models free of competing and conflicting interests. Our approach is to use a team of experts in finance, real estate, design, branding, information technology and cultural anthropology to work with companies and their teams to develop innovative location strategies, frameworks, footprints and solutions. Our goal is to align office location thinking and practices with the long-term fiscal and cultural needs of your business, moving beyond valuing square feet, to realizing the greater holistic value of office environments and business strategies. Howard Ecker + Company is a national tenant representation company headquartered in Chicago with offices in New York, Miami and Denver. In 2013, we completed 38 transactions across 10 markets with a value in excess of $70.9 million—while representing only tenants.

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Things to consider when renewing or relocating