Start looking for new commercial office space at least 12 months before your lease expires. Site visits, due diligence and drafting, revising and finalizing the lease take roughly 4 to 12 months, and sometimes as long as 24.
Looking for new commercial office space is stressful as it is near impossible to find a space that matches your current office configurations. What’s more, you have to go through lengthy lease agreements, evaluate different properties, implement due diligence checklists, and so much more.
The good thing about the whole experience is that you will probably get the best deal if you’re willing to do the legwork. Whatever the outcome, this article examines the optimal time to start the search for a new commercial office space.
How long does it take to lease a new commercial office space?
One common mistake tenants make is asking commercial real estate agents to search for office space on short notice. Whereas it may work in some instances, it is not desirable.
A lot goes into searching for a commercial office space. For instance, it can take:
- 1-2 weeks to draft a lease agreement,
- 2-5 days to make necessary changes and
- 3-4 weeks to finalize it.
And that does not factor in site visits and due diligence checklists. Roughly, it will take you 4-12 months to get your desired office space. At times, it takes up to 24 months. So if you want to relocate, start no later than four months before you plan to move.
What are the signs it is time to look for new office space?
1. The Expiration Date of Your Lease Term
Every lease term has an end, typically stated in your lease agreement. If your lease term expires in the next 12 months, it’s probably time to start looking for a new space.
2. Expanding or Downsizing Your Business
Your business might be doing well, and you are looking forward to adding new members to your team. As a result, you will need to open a new branch or relocate to a bigger space.
On the other hand, your business might be incurring losses, or you have too much space and don’t see how the business will utilize it in the future. The most sensible move is to cut down costs by relocating to smaller office space in such cases.
3. Inevitable change
Change is part and parcel of human and business dynamics. Some changes may come from external or personal factors. Some of the reasons that can force you to start looking for new commercial office space include:
- Spotted a better option
- Wanting a change of environment
- Relocating with your family
- Inability to pay hiked rent and other expenses
Before you make any decision, check the ancillary terms in your lease agreement on how you can terminate your lease prematurely. If you fail to do so, you risk getting fined.
What affects how long it takes to find new office space?
Finding a suitable commercial office space takes time and dedication. As noted earlier, it takes 4-12 months to find a new place to relocate. The duration it will take you to find a new office depends on:
1. Location
Searching for new office space in the same building will make a move easier and take a shorter time to execute. You can start looking at moving to this new space within a short period.
After all, you are already familiar with the property, the owner, and the nature of the lease agreements. This option is favorable if your only reason for looking for new office space is to accommodate new members joining your team.
However, this is no guarantee unless you have prior information from the property manager.
On the other hand, it might take longer if you plan to relocate to a new office space in a different building, area, or state.
2. Your Team
Hunting for new commercial office space is no walk in the park. It will take you longer to find one if you handle the task single-handedly than having reliable individuals to help you out.
It would help if you got in touch with a commercial real estate broker or agent. With experienced personnel at your disposal, chances are you will find a suitable office space in a shorter period.
3. Laws and Policies
Every locality has laws and policies concerning real estate properties, which may differ from state to state.
It may take you a shorter time to relocate to a new office space in the same area because you are familiar with the laws. Some states have stringent rules and regulations, imposing a range of requirements that you may not meet in a short time.
In this case, liaise with a commercial real estate law firm and agent in that state to help familiarize yourself with the laws and process any documentation.
4. Number of Available Properties
At times, you already know what you want or have many options you want to consider.
If you have a particular property in mind and it is vacant, you will likely relocate from your current premises sooner. However, when you have a long list of properties lined up for your consideration, it will take you longer to:
- Compare lease agreements
- Cross-check due diligence checklists
- Pay a visit to the properties
5. Financial Ability
As you would expect, your budget will probably determine how soon you should start looking for a new commercial office space.
If you have no issue paying above market rent for a commercial space, you will probably get space faster as there are few takers for spaces that are not worth the asking price.
If you are looking for a reasonably priced spot or better, your search will be longer as the competition is higher and no one wants to let go of a good deal. The recommendation would be to start searching as early as two years before the planned move.
6. Timeline and Demand
Note that your relocation timing and the market timing may vary. What time you choose to occupy the new space may not match the vacancy and occupancy period.
Similarly, if there is high demand in the area you want to settle, you will have limited options. Therefore, discuss with your agent to identify the most convenient period to look for a space in the area of interest.
Bottom Line
While there is stability in staying in your familiar comfort zone, some circumstances will force you to reconsider moving to a new commercial office space.
For instance, your lease may be coming to an end, you’ve employed a new team as the business is expanding rapidly, or you want a change in scenery. An unfavorable new lease agreement may also compel you to look for a new space.
Remember that getting a suitable commercial office space to meet your needs can take 4-12 months or even more.
Frequently asked questions
What are the common mistakes in office leasing?
The most common one is asking a commercial real estate agent to find space on short notice. Drafting, revising and finalizing a lease alone takes weeks, and site visits and due diligence push the full search to 4 to 12 months. The second is deciding to move before checking the ancillary terms that govern ending your current lease early, which can leave you facing a fine.
Should you use a broker to find office space?
Yes. Searching on your own takes longer than working with reliable people who know the market. A commercial real estate broker or agent shortens the search and can help you pick the most convenient time to look in a high-demand area. If you are moving to another state, pair the agent with a local commercial real estate law firm to handle unfamiliar laws and documentation.
Can you break an office lease early to move?
Only on the terms your lease allows. Before you commit to a move, read the ancillary terms in your current lease that explain how you can terminate it before it ends; skipping that step risks a fine. Moving within the same building is often the simplest route, since you already know the property, the owner and the lease terms, but confirm available space with the property manager first.
