"The harder you work, the luckier you get." This couldn't…
The 5 Steps to Acquiring Your Next Space
Often in my business clients ask me to explain the process of acquiring their space. The process consists of understanding the time it will take to search the market, negotiate the business points, performing the tenant improvements, the act of occupying the space and proper representation. Let’s break each of these steps down one by one.
In today’s picked over market, the amount of time it takes to find the space that fits the need of your business can seem daunting. It is important to start with the end date in mind to create a realistic timeline of events. If you are currently in a lease, I highly recommend beginning your search a year in advance of the date you need to occupy your leased space. This timeline could grow if you desire to own your building as the selection of properties available to purchase in the market has dwindled greatly due to the atmosphere of low interest rates we recently experienced. There are not many speculative buildings planned in the near future in Albuquerque. You may decide to purchase land and construct a building. If this is your desired outcome, you will need to plan on it taking between eighteen months to two years.
Understanding your budget will greatly enhance your ability to move quickly into negotiating the business points of the transaction, especially if the owner is experiencing multiple offers. It is beneficial to have a conversation with your business banker, attorney and/or CPA to best understand the loan amount for which you are able to qualify while continuing to successfully operate your business. The negotiation process takes into consideration rate, operating expenses, owner contributions, timing, and other deal point concessions. Both sides of the transaction will want to consider all elements of the deal structure in order to ascertain if the outcome is one they desire.
3. Tenant Improvements.
Once a space has been selected, it is also important to understand the amount of Tenant Improvement work that will need to be performed and who will pay for it. Post pandemic, we are still experiencing delays in supply chains. The amount of time it may take to permit, order supply and perform the work can vary greatly depending upon the selections made. This can impact the timing of occupancy significantly.
It takes a tremendous amount of planning to pack and move into your new space. Everything from internet to furniture to the interruption of your business needs to be taken into consideration. I highly recommend hiring a moving company to assist with the heavy lifting. Additionally, the coordination between the moving company and the members of your team may require one or more staff members working through the logistics, coordination and timing. Once the move is behind you, I can assure you, the moral in your work place will be lifted as the staff members enjoy the newness of the space.
As you begin the process of acquiring your next space, do yourself a favor and work with a licensed Realtor. The person representing the owner will always have the owner’s best interest in mind. By utilizing a licensed Realtor to solely represent you, you will be sure an expert has your best interest in mind. This service is generally at no cost to you, rather the owner pays the buyer/tenant broker commission. So, pick up the phone can reach out to an experienced Realtor who will share their market knowledge with you to help you through every step of the transaction. If you do not currently have a relationship with a licensed Realtor, feel free to contact me. I would be delighted to share my market knowledge with you and assist you to full fruition of the transaction.