Over the past thirty years of my career I have seen a lot of mistakes that intelligent people make when it comes to leasing office space. These mistakes can be avoided by using a professional office space broker but unfortunatly the tenant has no idea that they are making theses errors.
Furthermore, even after the tenant knows the pitfalls to avoid their lack of experience truely places them at a distinct disadvantage when they are usually negotiating a lease with a seasoned broker that is representing the landlord. The brokers sole task is to make the best possible transaction he can for the landlord and in no way is looking out for the tenant’s financial interests.
So with this in mind lets discuss what I think are the biggest office leasing mistakes an inexperienced Dallas office tenant makes when they are not using professional Dallas tenant representation services:
- Timing…..If you wait until you are one hundred and twenty days out for lease expiration or until you start to look for new space you are about to give the landlord a distinct advantage in the negotiation. All searches should start at lease twelve month’s prior to lease expiration or before the tenant requires occupancy.
- Only Considering The Rental Expense…..While the cost of the space is important to the bottom line so is the cost of selecting an inferior location that you will occupy for the next five years. Additionally the quality of the building, location and amenities will also have a dramatic effect on the quality of the Tenant’s staff and leasing experience for the company. I find it ironic when a tenant chooses the cheapest building with the lowest rental rate and then they are astonished that the building isn’t maintained as well as a Class A building. It all comes down to money you get what you pay for with office buildings.
- Poor Definition Of Leasing Objectives…..Inexperienced tenants usually don’t define the exact requirement that they are looking for when they begin looking for office locations. They start calling numbers from signs and have no idea that the building they are calling will not be able to accommodate their needs. Furthermore they often try to make a square peg fit into a round hole. Not understanding that they will choose the wrong space and be miserable for the next five years. Everything begins with objective planning at the beginning of the process.
- Delaying Decisions…..I have seen this hurt so many tenants that because of this error became my clients. The Dallas office market is very volatile. Landlords are not going to wait upon you to make a decision. When a tenant finds the perfect location and then they procrastinate it can be a very negative experience. After spending hours calling signs, surfing the internet, screening 20 brokers calls they find the space and then don’t take action. I cannot explain it but another prospect shows up for the same space and they have better financials and the space is gone. Usually this happens to the tenant that is guilty of not paying attention to timing. Now panic sets in and poor decisions tend to be made.
- Not Designating A Leader…..Somebody in the organization needs to be focused on the real estate transaction. They need to be the person accountable for the management of the entire process. After all, this is a very important decision. The office space is in the top five list of things that have the most impact on a business. The leader will help you avoid office leasing mistakes.
- Estimating The Wrong Space Size…..Often the square footage requested by a tenant is undersized because they are focused upon cost and not the functionality of the space. This is a major mistake because the tenant soon learns that the space is to small for their business and they are committed to a lease agreement. Obviously they were worried about the expense but now they have hurt their ability to increase income. Don’t let this error happen to you use our office space calculator to give you an idea of the square footage you should require.
- Not Getting A Space Plan…..Every lease should have an exhibit with the space plan attached to it. The plan should reflect the work that the landlord will perform and be addresses in the construction work letter. The construction should never be based upon a verbal agreement with the landlord or their broker. Document the agreement into the lease.
- Planning For Growth…..Options are the most important thing for a tenant in a lease. There are ways that experienced brokers negotiate expansion options into a lease. If you don’t know how to do this give us a call and we will help you.
- No Market Knowledge…..Would you agree that a person that practices the same thing hundreds of times can do a better hub than a person that has done it three or four times. Do you think a person that has been active in the Dallas office market every day for twenty years may possibly have an advantage over a person that leases space and ttys to understand the market once every five years? Market knowledge is gained by being active and that comes from helping Dallas office tenants every day for more years than many of my clients have owned their businesses.
- Preparing For Lease Expiration…..What a crazy idea! We haven’t even signed a lease but we are already talking about its expiration. I know it sounds silly but you need to allow enough time at the end of your lease so you don’t break rule number one. You also need to read all the fine print in the lease regarding landlord expectations when the tenant vacates a space. This is one of the many areas where Dallas office market knowledge could be very handy.
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Our services are paid for by the landlord. We work one hundred percent for your interests. Our service is of no expense to you however, not using our service could cost you thousands.
If you choose to not work with us I hope that the ten ideas tips listed above will be beneficial to you as you continue your Dallas office space search.