How far out should my company start our search for office space?
Topics: Commercial Real Estate, Office
Markets: Athens (Limestone County), Baldwin County - All, Baldwin County - Condo Only, Birmingham Metro, Calhoun County, Cherokee County
As your company grows or changes throughout its lifetime, you may find yourself moving offices many times. While there are a few cases of offices remaining in the same place for the life of the company, most growing and successful companies end up in many different spaces of varying quality. If you know that you would like to move your company to a new location in the near future, when should you start the process?
The answer is that it simply depends. It depends on the goals of your company and the goals of the move, but here are some general guidelines.
Most office leases in the Alabama market are three, five, seven, or ten year lease terms. While these may all seem like a long time, you may need to be worrying about relocating quite a way out. There are a few different scenarios that have different lead times.
New Build: If you are seeking to locate to a brand-new building that is being built for your company, a good rule of thumb is two years. While a building could be delivered in less than two years, it would be advantageous to leave some time for the design process and to make sure all the fine details are just right. In a built-to-suit situation, you will be able to occupy space that is built out specifically to your needs brand new, and you will likely be here for a longer length of time than a typical office move because of the cost the landlord is spending to build this space for your company. While two years may seem far off, early planning will allow for space that meets your needs far better than what may currently be on the market.
Retro-fit: Retrofitting older office space seems to be the most common decision by office users, and while many may think that repainting and office and throwing down some new carpet would not take too long, it is likely a better scenario to start this search well before six months is left on your lease. The reason being that while a search itself could take some time, factors like lease negotiation, space plan adjustments with architects, and lead times on products used to build the space could leave you in a bind if you did not budget enough time.
As-is: Occasionally, yet rarely, office users will take an office in “As-is” condition. This is typically more due to economics and lack of time than the fact that it is a good fit. After a space has been occupied by another company for three, five, or even ten years, the wear and tear on the space will usually be significant enough that you will want to retrofit the space. However, If you start your search too late, this may be the only option. You may find an as-is space and be able to move in as early as one month out from your lease expiration, but that is not recommended.
Whether your lease expires in five years or five days, if you believe an office move even could be on the horizon, it is best to contact a qualified commercial real estate broker who specializes in office space that will be able to help you navigate different scenarios.
James Lomax is a Commercial Real Estate Broker with Colliers International in Huntsville, Alabama. He can be reached at 256.503.6088.