Don’t waste your time
Viewing a property can be quite an awkward experience. You’re greeted by someone who you have never met before and then proceed to slowly pace around a room, followed by said person. Within the first few minutes, you know if the space is right for you. Initially I would continue to ask questions & feign interest, even if I knew it wasn’t ‘the one’. Then this stopped at approximately viewing # 4 and my motto soon became ‘get in & get out!’
Manage expectation with your team
A new office comes with added hype internally. As soon as you mention a move, your team are daydreaming of Google-esque hang outs, sleeping pods & slides — but when you’re working with a non-Google budget, this is just not going to be the case.
We approached it from a generalist perspective — keeping the team informed but not giving too much away. Mainly providing key insights into catchment areas, size of property & facilities, but not highlighting each of the properties we viewed.
What I’m saying is, be careful with the specifics — as soon as our team got a whiff of an address they’d have it up on their screens calculating commute times and scouting the best coffee shops. This was challenging as if it didn’t work out, the disappointment was heightened.
Managing your expectation of what you can get
We called it ‘aspirational realism’. That’s where you set your goals pretty high, but not too high. Know what you want and what’s within your budget, then go from there. The expectations around what an office should look like has completely changed — long gone are the days of a 2x2m cubicle with no natural light and in come the warehouse-style buildings and collaborative working spaces. All of those new fads don’t come for free!
Play your cards close to your chest
Once you have a spot you like, that’s when it gets interesting. The negotiations can take weeks or months as there is so much to consider. There are a few things you can leverage or aim to have included in the contract, such as:
- Outgoings included — this is the rates, insurance & can really vary from property to property. Always ask what the outgoings are on your first viewing so you don’t get a shock later.
- Rent free period — ultimately the landlord is interested in how much they can state the potential rent per annum is when they sell the property in the future. Even if they have a rent free period (temporarily reducing what the tenant pays) then the total $ per annum stays the same. This is a great negotiating tool.
- Renovations included — quite often the property won’t have the ‘fit-out’ up to the specifications you are looking for. Whether this is an inclusion of bathrooms, meeting rooms or a kitchen revamp, this is all up for grabs in the initial negotiations.
- Length of lease — it was a learning for me that tenancy terms are on a fixed time period — then once that period has expired you have another fixed lease term already negotiated. For example, 3 x 4 means that you sign a lease for 3 years and at the end of the 3 years you are able to negotiate again starting at a 4 year lease. The lingo here is ‘3 by 4’ which I hadn’t come across before — I thought it referred to the size of something!
- CPI increase — this the landlords was of ensuring that the rent will increase after a fixed number of years. For this move we agreed on a 3% CPI increase after 3 years but this varies.
- Commercial vs residential — once you’re moved in, the obligations from the landlord are different. Unlike in a residential property, in commercial leasing the repairs and maintenance are your responsibility. So before you move in it’s essential to check what is/isn’t working (whether it’s light sockets, locks, electric doors) and ensure that there is an agreement in place to resolve prior, or negotiate a lower rate.
- Length of advertising — the longer a property has been on the market then the higher likelihood that you can negotiate a decent rate. We were working with a fixed deadline which meant that we could not afford for any ‘faffing’ when it came to signing so we didn’t push it as much as we could. But knowing that a property had been on the market for 6+ months meant we could leverage some bargaining power as the landlord wants a tenant.
Don’t push it too far
You want a good relationship with your landlord, especially if you plan on being in the property for a minimum for 3 years. There’s a risk that if you go in too low for the first offer that they won’t take you seriously. Put yourselves in the shoes of the landlord and be realistic with what you would expect.
Visit the property again & again….& again
Each time you go to have a look around you will notice different things each time. Whether it’s the location of the plug sockets, the echo of the room or if the windows open inwards or outwards — these are all important functions. We ended up writing a list of features of the current office & how we use them, then comparing it to the new space. It’s the small details that will make the biggest difference.
That’s a wrap! We’re in our new space & we’re loving it.
I learned a lot in this move which has changed my perception of what a relocation actually entails. That’s the last time I want to be a ‘mover’ for a while, but after going through the experience I’ll be embarking on the next one with a set of polarised lenses instead.
You can now find the 24 team at 424 Smith St in Collingwood, Melbourne. If you’re a local we would love to have you drop by & check out the space.