ATLANTA, GA (Oct. 2, 2013) – As the way people work
continues to change, so does office space. Many companies are moving to
smaller, more open offices and exploring alternative ways for employees to
work, including benching and hoteling.
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| Michael Bull |
Those were several
of the points made during the most recent episode of the “Commercial Real
Estate Show” radio program, hosted by Michael Bull of Bull Realty. Bull
and his guests discussed office layouts, lease terms and mistakes tenants
should avoid in lease negotiations.
Nationwide, the
trend of companies reducing square footage per employee continues, said Scott
Panzer, vice chairman at Jones Lang LaSalle. “The last couple of years,
square footage per employee has dropped to 200 square feet or less. Now there’s
a push to get it under 175 square feet,” he said.
The decrease in
square footage per employee has resulted in the creation of more collaborative
space, said Richard Rhodes, managing principal at Cresa Partners.
 |
| Scott Panzer |
More open office
layouts also have been growing in popularity. “If you look at various Jones
Lang LaSalle offices throughout the country, by and large everyone has an open
floor plan,” Panzer added.
As office space has
changed, so have lease terms. While tenants once focused primarily on rent
abatement and tenant improvements, they now are concerned with self-help
provisions, said Bob Chodos, principal at Colliers International. “The
right to fix a problem and offset the cost against rent is important to
tenants,” Chodos said.
 |
| Richard Rhodes |
Flexibility also is important, guests said. Contraction,
termination and expansion options have been sticking points, Panzer said.
“Companies got burned in the past because they signed leases for too long and
took too much space,” he added.
Exercising a renewal
option without re-negotiating lease terms is a common mistake that tenants
make, Rhodes said. “Start the process at least 12 months ahead of when you
think you need to,” he said. “Having time as leverage, particularly in a soft
tenant’s market, can only work to your advantage.”
Hiring a good
advisor to negotiate lease terms on your behalf is key to getting what you want
in a lease, Chodos added. “Companies who represent themselves in a process as
complex as a real estate lease have a fool for a client,” he said.
 |
| Bob Chodos |
The entire episode
on office tenant strategies is available for download at www.CREshow.com. The next “Commercial Real
Estate Show” will be available on Oct. 3 and will examine single tenant net
lease investment properties.
For a complete copy of the company’s news release, please
contact:
Stephen Ursery
The Wilbert Group
404.405.2354
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