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Commercial Real Estate

CRE Opinion: Six Factors to Consider When Your Commercial Lease is About to Expire

Renew or relocate? That is the question.

Commercial leases are serious commitments, and there are many factors to consider when you’re determining whether it makes sense to stay put, or relocate.

Jo Staffelbach Heinz

When it comes down to it, the decision is all about your company’s plan for the future and how you can leverage your real estate to work harder for you. It’s not just about lease rates or the price of utilities – it’s also about the image and value your building conveys. Recruiting and retention of labor is a top priority for companies, and a positive enriching experience will set your work environment apart from others, allowing you to attract and maintain talent.

Below are six key considerations to factor into your decision to stay put or relocate:

Security

As designers, we practice Crime Prevention Through Environmental Design (CPTED), an approach that considers how the environment can be designed to protect employees in the event of a security threat. CPTED principles of design look at elements of the built environment from surveillance (e.g. landscape density and height, exterior and interior lighting, building configuration), access control (e.g. number of visitor entries, perimeter fencing and gating), and territorial reinforcement (e.g. clearly defined campus boundaries, well-maintained building conditions). When considering whether to renew or relocate, as ask yourself how secure you feel in your space. It’s impossible to prepare for every threat, but the safety of you and your employees should be at the forefront of your mind as you think through your options.

Demographics

The concept of “Live. Work. Play.” is important to today’s working professionals. For many job hunters, location is a determining factor, so it’s important to consider where your employees live in conjunction to where your office is located. Are there affordable housing options within walking distance of the office? Do your employees need to travel long distances in rush hour traffic to get to work? Is your location serviced by rapid transit and is affordable parking nearby? For most workers, a commute of some length is unavoidable, but your office should be easy for most to get to in a manageable amount of time, whether they travel by car, bus, train, or some other means of transportation.

Energy Optimization + Green Building Initiatives

Sustainable building practices, including Green Building Certifications, are fast becoming a worldwide standard. What’s more, these practices are closely watched by young, talented workers and can serve as a strong draw for your recruiting efforts. As you consider whether to renew or relocate, think about whether your existing building is utilizing energy optimization strategies to help lower energy costs, improve efficiency, and reduce the building’s carbon footprint. Determine whether your current location utilizes alternative energy sources such as solar, which can help ensure long term affordability. Has the energy platform in your building been updated recently? Understanding the energy efficiency of your current location can help you better decide whether it makes sense to stay, or look for alternate options.

Technology

Technology continues to advance at a rapid rate. The tech-savvy, mobile workforce of today expects reliable wireless access, sophisticated A/V equipment, and the most up-to-date platforms on which to do their jobs. Look closely at how robust the technology infrastructure is in your building. Are your needs and requirements being supported? And does your location offer built-in flexibility to accommodate future technological advances?

WELL Concepts

WELL concepts, including WELL Building Standards, focus on how a building’s design impacts the health and wellness of occupants. High-quality, high-performance workplaces should focus on indoor air quality, lighting, water, nourishment, and other factors that contribute to a healthy work environment. For example, does your current space offer healthy grab and go food options or opportunities for convenient food deliveries? Is there a connection to a fitness facility, jogging track, or trail access? Are there opportunities for outdoor connections such as access to courtyards, or walkways/pathways to surrounding areas that give tenants the chance to take outdoor breaks? Office spaces that positively affect the well-being of employees not only improve how they feel, but also turn them into happier, more productive workers.

Building Amenities

Office buildings are increasingly taking their cues from the world of hospitality, offering employees spaces where they can relax, refresh, and engage with others. The kinds of amenities your building offers will play a vital role in whether you’re able to recruit and retain employees, and can also save you money through the potential use of shared spaces. Consider whether the property offers convenient and accessible amenities like a conference center or event space, deli and cafeteria options, a rooftop terrace, outdoor meeting space/play areas, or other spaces within the property that offer a “wow” factor? Size of a space is important, but in many cases, the quality of what happens in that space is equally if not more imperative to the success of your company and your employees.

While leasing costs are still a prime factor in the renewal or relocation process, carefully considering a building’s features can help you generate value for your employees in every aspect of their work. The space in which you and your employees work is part of your overall brand – where you work says something about you. Considering factors beyond the upfront costs can help you determine if the building itself supports your leasing needs – now and into your next lease term.

 

Jo Staffelbach Heinz is a Dallas-based principal at DLR Group / Staffelbach.

 

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