The following is a guest post by Austin Lavin. Austin joined Corporate Realty in 2011 as the Director of Marketing and Communications. He is responsible for developing and implementing new strategies for connecting with current and future clients as well as improving internal communication. Austin is also a licensed realtor in Louisiana who works with a wide range of clients to solve their commercial real estate needs.
Every day, New Orleans and the rest of Louisiana become more and more startup friendly. Companies are launched, a connection is made, people are hired, and the growth of the community continues.
More often than not these events happen in some of our great co-working spaces like Launch Pad, the IceHouse, or Entrepreneurs Headquarters, but as our startup community matures and local companies get bigger, more and more entrepreneurs will graduate from co-working space and start their own offices.
It’s a big step in the life of a young company. While potentially daunting, procuring corporate space shouldn’t be so complicated that it takes away from the time you devote to other essential business operations.
There are many great commercial real estate agents who can help you through this process. Remember that since their fees are paid by the landlord, their services are free to you. Here is a basic outline of the process to help you get started thinking about what you need to make the optimum office space decision.
Step 1: Determine what you need
The first questions you must ask yourself are how much and what type of space will you need. Most office space is leased by square footage, which is easy to calculate once you determine considerations such as employee count, number of private offices versus open work stations, the need for conference rooms, and room for expansion.
Do you want a traditional office environment defined by private offices and cubicles? Or do you want a creative environment with an open arrangement of workspaces? There are experts who can help you develop a space program and layout to determine square footage. Your office creates and fosters the culture of your company. so it’s worth considering these questions internally before you begin actually look at office space.
Most office buildings are more flexible than you might expect. You may be able to find or build an open plan in an office building in the CBD, or locate a more traditional space in the Warehouse District. Knowing what type of feel you want will, however, help you narrow down your choices.
Step 2: Decide where you want to be
Many of the startup companies in New Orleans want to establish their offices near other like-minded companies and are clustering in certain buildings like the IP Building, The Exchange Center, and One Canal Place. But outside of these hubs, there are a variety of options throughout the state and landlords are eager to attract young and innovative companies.
Every location offers different benefits. The Class A and B office buildings in the CBD, Baton Rouge, or Metairie offer convenience and amenities that you won’t be able to find in a smaller building. Alternatively, small buildings throughout the state may offer other benefits like the opportunity for presenting signage and identification possibilities. Accessibility and commuting times for yourself and your employees are important factors to consider as well.
Step 3: Make a budget
Office leases in this region are generally for a term of three to five years or longer. Determining how much you can afford for space will allow you to narrow your choices and allow you to spend time focusing on realistic possibilities.
With your own office, you will now be responsible for other expenses like telecommunication costs and parking. Monthly parking in the New Orleans CBD is easily more than $100 per space. Regardless of whether you pick up this expense directly or if it comes out of your employees’ paychecks, parking is an expense that will ultimately come back to your company, so consider it and all other potential expenses when creating your budget.
The range of prices for office space in the region is relatively narrow so the decision on where to locate will likely have more to do with quality of life and operational issues than the price per square foot cost. Your actual monthly cost will ultimately be determined by how much space you need and the relative efficacy of the individual space.
Step 4: Identify your options and prepare an analysis
The local office space market isn’t very big so you will probably have some experience with the various office buildings in the region. While this knowledge is important in guiding your selection, a broker who knows market will know what is available and will be able to guide you through the potential opportunities efficiently.
A broker will generally create a survey of different spaces that meet your criteria that you can use to identify the spaces you’d like to tour and analyze what you learn in a uniform manner.
Step 5: Submit offers
To create competition among landlords and help you earn the best deal possible, have your broker submit RFP’s or offers for multiple spaces at the same time. There are numerous factors that go into a lease so your broker will attempt to cover all contingencies in your proposal to make an educated business decision and give you as many negotiation options as possible.
Step 6: Negotiate your lease
Brokers provide a great deal of value in composing and evaluating proposals, but it also often makes sense to have a lawyer look over your lease as well. Landlords are professionals with experience in contracts; make sure you go into your negotiations well prepared and with the right team.
Step 7: Build out the space and move-in
Once you pick a space and sign a lease, you’re almost done! One of the main advantages of establishing your own office is creating a space that best works for you. The cost of the build out will somehow be factored into your lease so have realistic expectations about what you can afford. However, even if you don’t think you can afford the perfect build out, you can do a lot with furniture and other design elements. Generally the landlord will construct your space, but be sure to stay involved and monitor installations and deadlines to insure your business can move in as scheduled.
When a company moves into their own office space they are making a long-term commitment to themselves and to the community. Deciding to start your own office is a big step in the life of a company, but one that demonstrates size and stability and creates a corporate identity. Choosing office space is a complicated decision not to be taken lightly, but there are numerous resources to help along the way. Take advantage of them and good luck.