Choosing the right space for your company is about more than just finding a place to hang your hat and do business. Space has become an important component of a company's culture and identity -- a factor that can provide a crucial recruiting and retention edge over the competition.
It's important to take that into consideration when deciding if the right fit for your company is an edgier, urban exposed brick feel in LoDo or a more traditional office setting in the CBD or Cherry Creek.
There are five key questions to ask yourself before you commit to a move.
1. Does your space reflect your culture and brand?
The commercial real estate industry has been redefined as a result of technology, lifestyle and work habit changes. Companies need to embrace these changes and recognize the importance of having space that reflects their brand, values and culture.
Our client,
NXTLAW, serves as a great example. NXTLAW is a law firm with a client centric approach. As most of their clients are small businesses and startups, they realized that the typical high-rise office space is mismatch. They are focused on finding a more casual space, close to the restaurants and coffee shops many of their clients work from during the day.
2. Am I spending too much?
Some people mistakenly think that a growing rent bill is the sign of a growing company. I know from experience that due to technology advances and workplace trends, many growing companies actually need less space (and expense) rather than more space.
These days, founders, partners, executives and entrepreneurs just do not care about varying office sizes as much as they once did because a new culture of egalitarianism and equality has taken a root in modern business. Many companies are ditching the private office all together while those that retain them are moving to a smaller, standard size office.
In a recent lease transaction for a financial-services client, the decision was made to shift to universally sized private offices. The conference rooms were pulled from private offices and that saved space was converted into small meeting rooms, accessible to the entire firm. These design changes are anticipated to decrease the company's overall Denver footprint by approximately 15 percent.
3. Am I hedging the potential risk?
Because of the volatility of our economy, any company signing a new office lease should seek to hedge three potential types of risk:
- Building risk: The risk that a change to the building's ownership or infrastructure impacts your occupancy.
- 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.
- Business risk: The inherent risks within your own business that impact profitability.
To mitigate these risks in your new office lease, you must clearly understand your ability (or lack thereof) to increase or contract your space over the course of that lease. This is especially important if you are considering a longer term lease of 5 or even 10 years.
4. Does the location support our employees?
Your employees probably work long hours. Outside of their home, your employees probably spend the most hours of their week in the office. For this reason, seek to find an office location that is convenient for your employees -- and not just convenient for the company's owners and top executives. Keep in mind that convenience is about more than commute times. Make sure your location is surrounded by amenities to support a strong work-life balance for your employees.
LoDo is gaining national attention as a prime example of a live-work-play community. We are seeing a focus on mixed-use developments that include residential, office and retail/restaurant spaces, which has attracted tenants not only from other parts of town, but from other states as well.
The redevelopment of Union Station, in the heart of LoDo, including the light rail connection to the Denver International Airport, will further revitalize the neighborhood making it a prime office location for companies focused on work-life balance.
5. Am I following old assumptions or paradigms?
What's "old" is also becoming new again. A prime example is the River North (RiNo) area, which has developers taking older industrial buildings and, rather than tearing them down, they are repurposing them into office and creative spaces that reflect the new ways people are using office space.
Landlords are also thinking differently. For example, we are seeing landlords in the RiNo area thinking more about community when they decide which tenants they want in their projects. They're not just taking the highest bidder, they want tenants who are invested in the community, who will bring business and give business to the other tenants in the neighborhood.
So what's the most important thing to remember?
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) should be top of mind for the forward-thinking business owner, partner or entrepreneur.
That is why I 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.
Howard Ecker founded Howard Ecker + Company in 1975 as the first real estate company in Chicago devoted exclusively to representing tenants. From working on one of the original leases in the Transamerica Pyramid in San Francisco in the early 1970s to currently representing national accounting firm BDO USA, Howard's 40-plus-year career has included many significant projects. Howard works with business leaders across the U.S. to align office location thinking with the long term fiscal and cultural needs of their business, connecting the worth of the company to its brand, culture and environment.
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