This week, we're featuring a recent article from our very own Todd Stevens. Todd highlights the impact a permanently remote workforce can have on the need for office space. He asks some hard-hitting questions used to help define the workspace a client needs or could use as the office space landscape is changed by the pandemic.
By Todd Stevens - Cresa
November 9, 2021
The pandemic has forced many businesses to adopt new methods of work. Virtual meetings and remote work, while not entirely new, have become commonplace and most people would agree are here to stay. The Zoom fatigue that so many of us were feeling a year ago when every meeting was virtual has been replaced with video conference technology, now seen as a tool to work more efficiently. And the ability to work from somewhere other than your office while still staying connected has caused many executives to reevaluate their space utilization. They can now shed what is no longer needed or used.
Though the rate of reduction may vary, most companies can thrive in less space. But how much space can you save by incorporating remote work into your long-term workplace strategy? There is no one-size-fits-all approach; the answer varies from business to business and even from department to department in larger organizations.
At Cresa, some of the key steps we work through with our clients in evaluating your needs are:
1. Classify employees by work schedules (agile, anchored, or full-time remote).
2. Understand support and shared-space utilization to ensure the right types and quantities of non-desk spaces are planned for.
3. Determine the ideal ratio of anchored and flexible workspaces.
With a clear understanding of what you need, the next step is finding opportunities in the market that fit your work model while still supporting employees with the space they need. And as more companies have begun to incorporate these space efficiencies and ultimately lease less space, building vacancies are forcing landlords to assume more risk and become more willing to negotiate with tenants. In short, tenant leverage is increasing.
Whether you are renegotiating an existing lease or looking for new space, the time is now to address your real estate strategy. In concert with your business’s goals, amongst others, we will help you consider the following points of negotiation:
- Abandonment – Reserve the right to work where you want, when you want.
- Audit rights – Landlord mistakes are unintentional, but inevitable.
- Force majeure – Rent protection from the unknown.
- Holdover – Planning for the unexpected.
- Lease length – Is shorter really better?
- Notice provisions – Secure communication timelines that meet your needs.
- Operating expenses – Ensure you get what you pay for.
- Renewal options – Renew all or part of your space with less notice.
- Rental rate – Leverage market conditions for a more favorable rent structure.
- Rent abatement – Delay the start of rent, offsetting costs.
- Security deposit – Use your cash to support your business.
- Subleasing and recapture rights – Use your space your way.
- Tenant Improvement allowance – Reduce exposure by limiting capital expenses.
- Termination rights – Only you should decide how long your space works for you.
- Landlord default – Protect yourself from overleveraged landlords.
An upcoming opportunity to renew your current lease or relocate and downsize is likely in your future. Regardless of which decision you make, you’ll want to start the process early. In fact, the earlier you begin, the more likely you’ll make a sound decision that resonates across your organization. Site selection and lease negotiation are time-consuming and critical, and you’ll want to work with representatives who understand the market landscape and can perform lease reviews and audits that ensure fair-market terms.
End of Article
If you have significant questions about your current real estate strategy, it may be time for a discussion. Once we have started our conversation, we can create a strategy to look at your business operations and current space and then craft up a plan to find something that is a great fit in the area. With the current vacancies and inventory, we will work with you to get the best deal. We represent tenants ONLY, so you can feel comfortable that we are working for your business 100%. If we can help you by being your tenant broker in the DC, Maryland, or Northern Virginia area, visit my website or call me at 301-841-6542. Make sure to follow all my social efforts by clicking on the links below.
I specialize in providing comprehensive real estate services,
exclusively representing corporate tenants on all commercial real estate needs.
Daniel Shapiro Commercial Tenant Broker
2 Bethesda Metro Center, Suite 900
Bethesda, MD 20814
301-842-6542
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