Rent premiums across the country have gone up by 11% or higher in cities with prime commercial real estate. From Midtown Manhattan to Santa Monica, growing businesses are unable to even find a space, let alone afford the exorbitant rental rates on top of the usual expenses of buildouts, IT, furnishing, etc. once they sign a lease.
So what is a business to do? The biggest factor businesses usually consider when signing a lease is the risk associated with the length of the their lease and the amount of space they are renting. If a business rents commercial real estate in Kansas City that doesn’t leave room to grow, they risk hitting a point where they are bursting at the seams before the lease is up. But if they rent a little extra space to plan for growth, and that growth doesn’t come, they are paying money down the drain.
Fortunately, there is a small glimmer of hope emerging in the commercial real estate market for those who are willing to think outside of the box. Here are some tips for re-invisioning the commercial real estate rental process while still protecting your business, as suggested in the articles “Criteria to Consider When Renting Commercial Space” and “How to Get a Handle on Exorbitant Office Rents”:
#1 Take your time looking for office spaces for rent in Overland Park.
One surefire way to end up overpaying for lease is to rush the process. Start looking for a new space long before you actually need to move. Giving yourself more time will not only allow you to see more options, but it will increase your leverage in negotiations.
#2 Assemble your criteria for a Kansas office space for rent.
To help you keep your eye on what is really important to your business, go into the search process with a clear list of criteria. Here are a few questions to consider:
- How much space do you need?
- What is your budget for rent? For other expenses like buildouts?
- What do you need in a location? (i.e. foot traffic, proximity to public transport, etc.)
- What features do you need? (i.e. conference rooms, private office spaces, a reception area)
- What features do you want to improve the efficiency of your business? (i.e. inexpensive power sources, employee parking on-site)
Relying on this list can ensure you don’t get caught up in other flashy features that your business can’t afford.
#3 Work with the right team.
Once you have your list, find a good commercial real estate broker who works for tenets, not landlords. Find someone knows the market and location inside and out. Work your way down to two or three final options, then start negotiating your lease. Before you sign the lease, hire one more team member–a real estate attorney who can double check your lease for any pitfalls or places where you could ask for more. Working with a great team might be a little more expensive for your business upfront, but getting a solid lease could save quite a bit of money in the long run.
#4 Embrace the uncertainty of finding a commercial office space for rent in Overland Park, KS.
Everything about modern life is moving away from a “one-size-fits-all” mentality. Companies like SaaS are introducing software models that allow for scalability and flexibility, and business rental could move in a similar direction in time. Right now the leasing industry is stuck in an old mentality, but as businesses demand more flexibility and scalability, there is the hope that things will progress.
In the meantime, it is okay to be afraid of the uncertainty of commitment, because the current market system is looking to maximize broker commissions, so it is a good option to keep your risks and liabilities low and maximize cash flow by signing short term leases.
#5 Cut costs with non-traditional models.
If you think about it, office space rental is your business’s biggest expense after payroll, so you want to consider ways you can maximize the efficiency and productivity of your space while minimizing costs. As mentioned earlier, businesses have two apparent options: rent a space that fits your business and risk outgrowing it, or rent a space that is too big and risk paying too much if you don’t fill it.
But there are other alternatives – for example, office sharing. Office sharing provides more flexibility within the traditional options:
- Rent part of a space on another business’s lease so that you have more flexibility to expand or downsize as needed.
- Rent a larger space for you to expand into, but offset the expense by sharing the space with another business until you need the space.
This is one example of a creative way to optimize your space and bring down expenses, but there are others, ranging from hot-desking to giving employees more flexibility to work from home. You just have to think outside of the traditional office space box.
If your business is interested in an office space for lease in Kansas City, give us a call at 913-685-4100 for more information about our available spaces!