Choosing the right office space can be daunting task, especially after hearing horror stories of what people have gone through in a bid to get space that matches their needs.
In this article, we share with you questions you should ask when you meet the landlord in spaces you have an interest.
How do you calculate floor space?
When calculating the floor area of office spaces, there are two calculation methods you need to be aware of : gross floor area and net floor area.
Gross floor area includes the inside perimeter of the exterior walls of the building under consideration, corridors, stairways, closets, the thickness of interior walls, columns or other features.
Net floor space is the actual area occupied. This excludes the corridors, stairways, closets and mechanical rooms. If toilets are private, they are calculated under net space. Shared toilets therefore are part of gross space calculation.
Knowing the calculation makes it easy to know the area usable for your actual office so you can do better design and building for the office you want.
The usual ratio of gross vs. net space is between 5%-15%.
For example, the floor space provided by a property manager is 10,000 sq.ft. The actual floor space (net space) you will use for the office is 9,900 sq.ft. at 10% ratio.
What size of parking do I get?
Parking spaces are usually calculated in a formula called parking ratio, which is used to compare the number of parking spots available to the footage of building space. For example, for every 1,000 sq. ft. of office space you have, you get 4 parking spaces. The ratio thus is 4:1000.
What type of office building is it?
Offices are categorized in three classes A, B and C with Class A being the highest-quality office spaces in the market, Class B being average and Class C are poor quality structures.
The buildings are categorized by age, amenities, aesthetics and general infrastructure.
Class A spaces are outfitted with top-of-the-line fixtures, amenities and systems. They are mostly located in high visibility locations and managed by reputable property management companies.
What amenities are available in this office building?
Finding out what amenities are provided for is important as you would know what is already available and see if any special requests you had have been taken care of.Amenities and features that you can look out for include:
- ICT and Fiber Infrastructure
- Security: Access control systems, CCTV surveillance, parking management
- Safety: Look out for provision of defined fire escape routes, modern firefighting equipment, an emergency alarm system and sprinkler systems.
- Lighting and Ventilation
- Access to retail and convenience stores and restaurants.
- Disability access
- Provision of private washrooms within offices
- Back up generator for electricity power cuts
- Boreholes- water storage
What are the lease terms and conditions?
Before signing any lease, you need to spend more time with the document and read word for word. Do get a lawyer to clarify some of the wording you may not be familiar with.
Key things to look out for are:
Flexibility of the lease: Most office leases have a span of 6-7 years. Negotiating for less time to have the lease is a great exit strategy plan that does not tie you down. Companies are quickly expanding and embracing technology and these factors may work their way to influencing needs of companies, which may not be accommodated by the current office space.
Renewal terms: Do check if you have first priority in the case of renewal of the same space that you are renting. If this is not clear in the lease agreement, discuss it with the property manager and have the clause inserted.
What are the hidden costs in lease terms?
The rent space is usually clear and advertised with indication of per square feet or square meters.
In the lease agreement, other additional costs are usually indicated and you need to be aware. They include:
- An initial deposit to start off the contract.
- A service charge usually charged per square feet or square meters for the amenities and features you will enjoy in the building.
- Parking charges per bay to which you will pay per month. The number of bays is up to your discretion.
The frequency of rental payment may be stated as quarterly or semi-annually. Knowing this will make it easy for you to plan your cash flows.
The escalation rate-which is pegged on increase in value of the real estate-is among the hidden costs listed in the lease agreement. It currently ranges from 5% to 10%. If you pay rent of $1000 in 2017 at escalation rate of 10%, in 2018, your rent will is expected to be $1100.
What incentives are available in lease agreements?
Property managers give incentives to tenants to get them to take space in buildings they manage. Incentives that you may have include:
- Rent free incentive during office fit-out period. The period varies from one month up to a year depending on the work you have to do the design and build.
- Discounts on space you take thus drastically reducing the cost and increasing options on what you can do with space you take.
What are the nearest amenities to the office building?
Having an office space located within reach of social amenities has proven to be an incentive to current and potential employees.
Employees have busy schedules and little time to do personal errands. Having these amenities nearby eases things including having concierge services. The personal errands include everything from dry-cleaning to grocery shopping.
The employer can be sure that provision of amenities takes the stress off employees and they can become more productive at work.
What are the responsibilities of Property Managers?
A property manager handles the daily operations of real estate, in this case, office spaces. Finding a reputable property management company may ease many things. The property manager is responsible for:
- Rent- setting rent, collecting rent and adjusting rent
- Tenant-find tenants, handle move outs, handle complaints and emergencies and deal with evictions.
- Maintenance and repairs: This includes provisions for electrical, plumbing and data sources when building the office space.
- Knowledge of landlord-screen a tenant, handles deposits, and terminates a lease.
- Supervising other employees and vacant offices
- Managing the budget and maintaining records pertinent to the property.