5 Leasing Tips We Can Learn From Dogs

The two most persistent beings in the universe have to be dogs and children. Why are these little cutthroats so good at getting what they want? Here’s a few take aways we can we apply to the commercial leasing process which should help your company get what it needs.

1. Explore all your options: Dogs will stick their nose in everything just to figure out if it’s edible. At the onset of facility negotiations, you need to enroll as many desirable locations as possible. You also need to ask for everything that would make a facility contract compliment your business plan. Be strategic in the structure of the financial terms and the amount of exposure so your business can thrive.

2. Be Persistent: Ever had a dog beg for snacks/your dinner/belly rubs/a walk and then give up after one rebuke? Me neither. So when you don’t get a positive initial response to your requested lease terms, ask again. You may need to modify the language a little but go for what your business needs until you get it.

3. Play Dead: With a little training, dogs will do this for a reward. Sometimes it’s necessary in lease negotiations to take a step back, act offended, and let a landlord think their negotiation strategy killed a deal. More often than not you’ll reap the reward.

4. Leave Nothing Left: Whether it’s treats or steak bones, dogs rarely leave anything unfinished. Real estate costs are usually the 2nd or 3rd most costly expense your business will incur. You owe it to yourself and your employees to mitigate the fixed costs and your exposure to additional charges in negotiations. Grind multiple locations down simultaneously and don’t leave money on the table. Use each site as leverage against one another. Push hard until there’s nothing left.

5. Trust Your Pack: Dogs are a pretty good judge of character, and in their pack (human or canine) everyone plays their role. You need professional service providers throughout the leasing process. An experienced tenant representation broker to guide you through site selection and negotiation, a project manager to assist with construction pricing, scheduling and vendor coordination, and an attorney to negotiate and review lease language. Not only can you leverage these professionals to create the best outcome, you can spend more time focusing on your core business while they work for you. Lone wolves don’t accomplish much, you need a pack.

 Jamal Brown is the CEO of The Ocean Company, an exclusive tenant representation firm with offices in San Diego, Orange County and Los Angeles focusing on the leasing and acquisition of commercial real estate.

Main: 858.356.2990 | E-mail: jbrown@theoceanco.com | social: @theoceancompany

Finding Your First Office Space

Congratulations, business is good and you’re ready to open your first office! Now what?

Startup companies that reach the point of needing an office location should examine all of their options before committing to office space. The toughest part of choosing that first office is knowing what criteria to base your decision on. Keep in mind that real estate costs are typically the second or third largest expense on a company balance sheet, and many companies remain in the red because they carry more facility related overhead than necessary.  Our suggestion for startup and small businesses looking for space is to keep three specific criteria in mind:

1.     How much space do we really need for the foreseeable future?

2.     Does the location or visibility of a space help our company generate more revenue?

3.     How important is flexibility in the lease of any space we pursue?

Entrepreneurs who have reached this point need to be wary of how they approach leasing space. For example, many take on more space than the business requires, sign leases that have a longer term than necessary, or fail to negotiate adequate concessions, and protective clauses, during negotiations. Others sign up with executive office suite operators without realizing that the premium they are paying for space there could get them larger, or more desirable space somewhere else. Co-working spaces have a similar model to executive suite operators, but are typically more flexible when it comes to paying for space. If your business doesn’t yet require you to be in the space on a day-to-day basis, this option could be for you. Our advice to most young companies is to scout the market for space listed for sublease before engaging with the afore mentioned options.  Subleased space often comes at a hefty discount from what the master tenant is paying the building owner. These spaces can come furnished, and typically have less than three years of term on them. Sometimes, a sublessor will even allow your business to sublease for a shorter term than what’s remaining on the master lease.  Finally, subleases are an agreement to lease space with the master tenant, and although the landlord must approve them, can often be attained without using the business owner’s personal wealth and assets as collateral should the business become incapable of meeting its debts. 

Startups and small businesses looking for space should hire an active tenant representative who understands their needs. The Ocean Company has assisted many young companies in securing their first spaces, and negotiates the best possible lease with your objectives in mind.