10 Important Factors To Consider When Leasing Your Office Space

March 10th, 2010

Why do companies choose to locate in certain office space vs. others?  Rofo.com explores the factors that go into selecting office space with their blog:  “10 Important Factors to Consider When Leasing Your Space”.  Here is the text from that blog.

Below we will reflect on how most companies make the decision about where to locate the office.

  1. Location, Location, Location: Not only a real estate adage, but a fact of life. The location of the office is usually described as the either the biggest benefit or biggest negative.
  2. Commute Patterns: Take a preliminary survey of your companies thoughts on their current commutes and use Rofo’s tool to determine how the new office location might effect their commute pattern.
  3. Amenities: What restaurants and coffee shops are available nearby? Being in an isolated office park can be a very bad situation for the comfort of employees. At times in cannot be helped, but being in close proximity to the amenities employees use during their lunch break can be a huge recruiting advantage. Please see our Rofo Amenities tool to look for nearby amenities as you search for space.
  4. Safety: What is the neighborhood like late in the evening? Have there been office or car break ins in the neighborhood recently? Would a female employee feel comfortable walking to their car or public transportation after working late on a project? All of these issues should be considered when considering your next location.
  5. Layout of the Space: Is the layout of the space desirable. Is there good separation between the lobby and the work space? Is there separation between the kitchen and the work space so food smells don’t permeate the office. Is there good natural light?
  6. Image of the Building: The question depends on how you are trying to present yourself to your clients and potential employees. If you are a law firm that helps with class action suits, it might not make sense to have the top floor of the nicest building in town. If you are the high powered corporate firm, it might be absolutely necessary to display that image. The location, layout, and feel of your building and space will leave an impression on your visitors and should be considered in your decision making process.
  7. Parking/Public Transportation: The proximity to public transportation and affordable and convenient parking are extremely important. Many of your key employees might need quick access to transportation as they visit clients while others need convenient and affordable ways to get to the office. The more transportation options the better.
  8. Recruiting: Will your location and building aid or hamper you in your recruiting efforts for top talent. How will the location effect current employees?
  9. Expansion: Will your location allow for easy expansion? Is there space available nearby that can work if there is not space within your building?
  10. Building Ownership & Maintenance: Is the ownership local? Is the HVAC system consistently broken? Your landlords involvement and attitude and responsiveness towards tenant repairs should be a critical element of your building decision.

Is the FDIC Having a Negative Impact of Commercial Real Estate?

March 9th, 2010

Today, I came across an excellent blog by Erika Morphy of Globest.com.  Her blog was titled “Does FDIC think about the impact it’s having on commercial real estate?”.  My personal opinion to her questions is a simple no.  The FDIC is a government run entity that has one job to do:  Sell off Assets That Have Been Seized from Failed Banks.  So, again, my answer is no. 

But, Erika’s blog did lead to ask another question:  Is the FDIC having a negative impact on Commercial Real Estate?  For this, I believe that the answer is yes.  I don’t think that the FDIC is purposely having a negative impact on the CRE world.  But because their job is to sell off assets as quickly as possible, I do believe that CRE values have and will continue to take a big hit with these auctions.  I also believe that these auctions will have a negative impact on other banks, as Erica did a great job pointing this out with the below example here in Atlanta:

recession_~k1437973“The most blatant example is news reported by Bloomberg that FDIC is holding a $1 billion auction in which it is selling off loans – including a loan to build a W Hotel in Atlanta – that may trigger write downs among other banks as well. Half of the loans were originated by Silverton Bank, according to Bloomberg – but several other banks joined Silverton in providing the $80 million W construction loan. These banks will have to take write-downs as the Silverton loan goes to auction, and possibly push many to the edge of insolvency. It’s not just this auction: reportedly of the $50 billion or so in loans seized by FDIC, 63% involve other lenders.”

Bottom-line for Commercial Real Estate:  I truly believe that in 2010 & 2011, CRE properties’ values will continue to decline while FDIC, or any other kind of auctions continue to take place.

5 Key Elements of a Green Office Space

March 8th, 2010

Whether you’re a small business owner, or an executive within a large corporate, you have an opportunity to lead by example when it comes to a Green Office Space.  Why might you care?  It saves money, helps the environment, and studies have shown that your employees are more product in a Green Office Space.  So what are some key elements to a Green Office Space?  Wendy Roltgen at SmallHomeBusiness.Suite101.com gives us 5 Key Elements of a Green Office Space.  Below are the 5 Elements:

- Eco Friendly Companies Use Efficient Lighting

- A Green Office Upgrades Old Equipment to Energy Star Models

- Eco Friendly Companies Recycle and Use Green Packing Materials

- Green Offices Utilize Renewable Energy

For more information about each element, please click on the link above and it will take to you Wendy’s blog.

Office Tenant Deals of Note From the Week

March 5th, 2010

There were a couple of signed office leases that were announced this week that are worth noting.  The first is IQ Interactive, an advertising agency who amongst other things came up with the white board ads for UPS.  They are also a Colliers International client.  IQ will be relocating its HQ to an office building overlooking the Chattahoochee River in the Northwest Office Market of Atlanta.  The company will be taking 23,000 Square Foot in their new office building.  CityBizList broke the announcement, and you can read more information about it by clicking on the CityBizList name. main

The other deal of note is coming from the Buckhead Office Market here in Atlanta.  Phipps Tower, one of the new office towers in Buckhead, has signed a lease with its first tenant.  Speakeasy, a communications traing firm, will lease 14,000 Square Feet in the tower.  The company will be relocating from their current location in the Midtown Office Market to Phipps Tower.  For more information on this deal, please click on the AJC link.

Commercial Real Estate: A Ticking Time Bomb?

March 4th, 2010

Commercial real estate is one of the big worries at this year’s Citigroup Global Property CEO Conference.  Tom Flexner, head of real estate at Citigroup, and Richard LeFrak, president of the LeFrak Organization, talk to CNBC.  Their discussion includes talks about a potential $200 – $300 Billion loss in commercial real estate.

LEED Certification or Simply Green Initiatives!

March 3rd, 2010

Today’s blog post comes from a good friend of MOSatlanta.com, Dana Anderson.  Dana is a Managing Partner of Facilitec, Inc, a Architectural Interior Design Services Firm, located here in Atlanta, GA.  I’ve asked Dana to explain what LEED Certified or Green Initiatives can mean to an office tenant.

LEED Certification or Simply Green Initiatives! 

LEED Certification, going GREEN and Sustainability are all hot headers in the real estate news since 2008 and will continue into coming years.  Since the 2009 LEED CI (Commercial Interiors) certification it has become more and more prevalent in discussions regarding the leased commercial office environment.  This is great news to our work environment and initiatives to help save on our global resources, which is part of our social responsibility.  However there is still the hurdle for many tenants of the cost increase in overall TI (tenant improvement dollars). 

Many experts still are teaching that going Green doesn’t cost more but they are really looking at return on investment ROI cost for the building owner.  The ROI documented statistics is after 10 years and in many cases 20 years.  These ROI’s are coming from increased rental rates or tax incentives and a 20% result in life cycle savings of the total construction costs.  As you can see this completely leaves out the benefits to a tenant less than 25,000 square feet and looking at a leased terms of three, five, seven or even ten year leases. 

There are many surveys that support thru USGBC, RREEF Research and other organizations that state Corporations believe in going Green and being sustainable.  Our mission as consultants to the commercial tenant then should be, not necessarily to get them LEED certified but to help them understand things they can do in the design of their space that really matters to not only our Global Resource issue but to their own ability to attract and retain employees by having a better work environment.  

People in the U.S. spend 90% of their time indoors.  Statistics say that productivity can be enhanced by 6.7% by using high-performance lighting and 3.6% by having individual temperature controls.  Lighting designs also are reflected in lower incidence of headaches and sick building syndrome.  The access to natural daylight also has a dramatic difference in employee moral and productivity.  There are a lot of things that do not cost additional money to a project just a change in approach and design while others do have a direct impact to the bottom line.  

Product manufacturers are getting better at coming up with sustainable solutions.  Shaw Industries a leader in the carpet industry released the first cradle to cradle broad loom product this year.  This is a huge stride in the increase cost of using the only prior approved cradle to cradle carpet tile options with starting cost at $22/yd installed versus a standard TI allowance of $15/yd to $18/yd.

Key Conclusions are that we can all do our part no matter the budget, size of the project or length of the lease.  Below are just a few other considerations you can mention to your clients. 

  • - Office recycling programs (some landlords offer this as a free service to their tenants)
  • - Access to public transportation
  • - Demographic Access to Day lighting
  • - Temperature Controls
  • - Consideration to Higher Efficient light fixtures
  • - Motion Sensor Controls or time clock
  • - Low flow plumbing fixtures
  • - Sensor fixtures
  • - Low VOC paint, wall coverings, and glue
  • - Recycle content products
  • - FSC certified woods
  • - Cradle to Cradle products and manufacturing processes
  • - Use of local vendors and manufacturers
  • - Reuse of existing conditions or architectural features
  • - Recycle demolished materials
  • - Donate un used materials or products to organizations 

This is just a small list of things that can be considered on a project to support the Green Initiative with zero to minimal cost increase to an overall project budget. 

Dana Anderson, IIDA, RID

Managing Principal

Facilitec, Inc.

danderson@facilitecusa.com

Is Cold Calling Killing The Commercial Real Estate Broker?

March 2nd, 2010

Last week I was invited to write a blog entry for a popular commercial real estate website in the Midwest by Duke Long.  The entry got a great response, so I wanted to share it with the readers of MOSatlanta.com.   Below is the blog entry:

Is Cold Calling Killing The Commercial Real Estate Broker?

I have been pondering this question for the last couple of years.  Ask most veterans in the industry how to generate more business, and I’ll bet you one of the suggestions will be to MAKE MORE COLD CALLS.  Has it worked for me?  Yes.  33% of my business has been generated from cold calls, including my largest deal to date. Granted, it took 10 follow up calls after the initial one, but the deal was nonetheless generated from a cold call. 

So, what makes me ponder the question?  Why would I think that a proven method would be killing the business that I love?  Two reasons: One, the number of calls my clients and prospects are currently receiving from other brokers; and two, the fact that cold calling puts the caller on a lower playing field than the prospect.

1.  Number of Calls.  Here is a great example of how bad it has become in my market.  A smaller client of mine (5,000 Square Feet) and I were having lunch a couple weeks ago.  We were sharing new business ideas, mostly about social media, when I asked him the question: “So, have any of my competitors said or done anything that has really stuck out in your mind?”  My client responded, “Honestly, I receive between 10 – 15 calls a week from brokers and it is all white noise at this point.  My lease expiration must be on some sort of database or something.”  His statement made me realize that even if I had some earth shattering news about my prospect’s current landlord, odds are that person is not going to hear it.  Even the best cold calls have now become “WHITE NOISE”.  Another example: a larger prospect (50,000 Square Feet) once told me the following, “Unless you can tell me that you’re going to save my company a billion dollars on my lease, I don’t have time to hear what you have to say.  Besides, 15 of your competitors have already told me that they’re going to save me money.”  I was referred to this prospect by his CEO.   WHITE NOISE… 

2.  Cold calling puts you on a lower playing field than the prospect you are calling.  Let’s be honest here.  Cold calling makes you look desperate.  It makes your prospect think you’re either green in the business, or you’re not very successful because you have resorted to making cold calls.  Either way, it is an uphill battle just to be considered an equal in the eyes of the prospect.  Add that mentality to the number of calls that contact is receiving from other commercial real estate brokers, and you’re now part of the desperate, bad broker business of commercial real estate.

So, what’s the answer?  Personally, I’ve decided to look for more efficient avenues to get in front of people.  I don’t want to be caught up in the white noise battle, or be seen as a desperate commercial real estate broker.  Times are changing, and our industry needs to change with it.  If you are going to make cold calls, please do the rest of us a favor.  Make the time to research the company and their situation so when you call a prospect for the first time, you have something to say that will add value and not waste their time.   If you approach your prospects as professionals with a unique message and proven template to save them time and money, then maybe, just maybe, you can set yourself apart from the white noise and avoid killing the commercial real estate broker through desperate cold calling.

I would love to hear your feedback in the comment section.  Thanks.

What an Office Tenant Needs to Know About Used Office Furniture

March 1st, 2010

Today’s blog post comes from a good friend of MOSatlanta.com, Bill Coons.  Bill is the President of Office Interiors, Inc. located here in Atlanta, GA, and I’ve asked Bill to explain what an office tenant needs to know about used office furniture.

I often get asked from both real estate brokers and clients about the possibilities of used furniture as a low cost solution to furnishing office space. They are surprised when I say it could be!   The truth is, it can be a very good solution if you have the correct expectations and you are willing to work the way the used or pre-owned furniture business works. Most corporate clients are accustomed to doing it in the timeframe that they choose and want it the way they want it. In the pre-owned business the rules are a bit different. If it is available and you want it you need to step up and make a commitment then or be prepared to look for another inventory.  If you work with a reputable pre-owned vendor they will direct you on timing and expectations. Below are a few bullets that give some insight on what to expect in the pre-owned furniture world.

Expectations: What you should look for

  • - Good pricing can be as much as half of a heavily discounted new product. Example: And 8 X 8 workstation equally equipped: New $2,500.00 vs Used $1,000.00 to $1,200.00.
  • - You will get close to what you want but not exactly. You will need to be more flexible than ordering new. It will be close to the color you may want and have more or less components that you need rather then ordering just what you need.
  • - Be prepared to buy when you find what you see as a close solution or be prepared to lose it. Pre-owned is sold to the person with the money in hand and is not held off the market to meet your timeframe.
  • - Pre-owed furniture is mostly in the systems side of the furniture world and not that available in the seating and private office areas. You can find it but it is not as easily accessible.
  • - Be prepared to pay an additional $200-$300 (per workstation) in some cases. This would be for charges that you don’t see when purchasing new.  Some examples would be freight, storage, and teardown at the current location.

Buyer Beware: Things to watch out for:

  • - Only work with a proven entity. There are a lot of moving parts in a pre-owned project and any one of them can very easily cause delay and unexpected expense. 
  • - Plan a purchase strategy to insure that you get the outcome you expect. If you approach it with a plan and give yourself time to get educated you can end up with a very good value but it is not a last minute process.
  • - Don‘t be so closed minded to buying new furniture. Sometimes good used furniture and new furniture do not have the cost delta that you would think.
  • - Most clients are not looking for used or pre-owned furniture; they are looking for a low cost solution. By educating yourself to all the options you can get a low cost solution but also insure that you get a great value that includes furniture, services and a consultant that responds to your business needs and not just sell you furniture.

Bill Coons is the President of Office Interiors Inc. in Atlanta, GA and has a thirty year history in contract furniture and owns an architectural interior company as well that provides turnkey solutions for corporate clients across the U.S. He works closely with commercial real estate brokers to provide solutions in relocation, budgeting and design.

Real CRE TV to Launch Here in Atlanta

February 26th, 2010

Commercial Real Estate TV, here in Atlanta?  Will it work?  I must say that I like the idea, and I do agree that there is a lack of credible commercial real estate reporting here in Atlanta from the mainstream news outlets.  In fact, the best places, in my opinion, for up-to-date, correct commercial real estate news are various blogs throughout the city.  Skyline Views, Citybizlist, and the one you’re currently reading to name a few. 

But, will CRE TV take off?  Are there enough people interested in Atlanta’s commercial real estate market to make a profit?  The real answer is I don’t know.  Will I watch it?  Yes.  Will other brokers in Atlanta watch it?  Probably.  Will the general public watch it?  Don’t Know.

So, MOSatlanta.com wishes Real CRE TV good luck, and we’ll be watching.  If you’d like to read the PR announcement from CRE TV, please click on the link below.  If you have an opinion, I’d love for you to leave a comment and let me know your thoughts.

Real CRE TV to Launch Here in Atlanta

Commercial Real Estate Bottoming?

February 25th, 2010

Neal Elkin, of Real Estate Analytics, and Harvey Green, of Marcus & Millichap Real Estate Investment Services, share their insight.  Airtime: Tues. Feb. 23 2010 | 10:42 AM ET