Welcome to Part 3 of the 5 part series on the commercial lease process. Part 1 The Commercial Lease Process – Part 1 detailing four crucial lease clauses to review before you embark on an office relocation or renewal and Part 2 The Commercial Lease Process – Part 2 explaining how creating a team, timeline and budget is necessary.
How Much Space Do We Need?
After you have reviewed your commercial real estate lease, assembled your team, timeline and budget, the third step in the commercial lease process is to make a preliminary determination of the amount of space needed.
To determine how much space is necessary, begin by polling key personnel and the heads of various divisions to determine how your existing space functions. There should be discussion regarding your current layout, what works well and what should be modified, based on changes to your organization, industry, etc. Size is a key consideration, but sometimes less is more if you are providing optimal design efficiency.
How to control rental cost?
There are essentially two ways to control rental cost:
- Minimize the cost per square foot;
- Minimize the amount of space leased.
Many companies focus solely on price per square foot and end up leasing excess space.
Even in a tenant favorable market, there is a limit to how favorable a rate a landlord can offer. By reducing unnecessary office space by 10 or 15 percent, your company can significantly reduce the total rent amount. Tenants often find that a high-quality office building ends up saving them money even if the cost per square foot is higher. This is because modern, higher quality spaces are created with ergonomic principles designed for greater space efficiency.
Benchmarks: Square footage per person
Use a benchmark of 200 rentable square feet per person to get started. That is equivalent to a 14×14 bedroom. Considering that a mid-sized cubicle is only 8×8 or 64 square feet, 200 might sound excessive, but that includes space for hallways, walkways, conference rooms, and a kitchen.
If your budget is tight, reduce the square footage to 125 square feet for a high density open layout. Click on the attached office space calculator to get an idea of typical sizes for offices, cubicles, conference rooms, etc.
Feel free to use this helpful office space calculator.
Have a furniture dealer lay out your space
It can be difficult to imagine how much space your staff needs. Fortunately there is a free and easy solution. Most potential landlords can provide you with an empty architectural floorplan. This floorplan can be taken to an office equipment dealer, who will lay out an office plan for free in the hope of earning your future business. The floorplan can then be manipulated on a computer using an image editor like Photoshop.
Image Courtesy of “Vision Artwork” by arztsamui FreeDigitalPhotos.net