A Guide To Renewing Your Office Lease
If you are renting a commercial office space, at some point, you will have to think about whether you want to renew your lease or move offices. A future lease... Read More
6 ways to save $$$ on your office space.
Learn more >April 13, 2018 | by Graham Shorr
Reviewed by real estate expert Jonathan Wasserstrum
The first step to any office move is taking time to understand your budget, needs, and deal-breakers. This up front exercise will go a long way towards focusing your search and quickly finding the perfect office space. At SquareFoot, we’ve helped numerous hedge funds find the right space for their professional needs. Here are a few tips from our brokers on how to hit the ground running with your hedge fund office space search.
Two primary determinants of your rent on a per-square-foot basis is how long you’re willing to commit to a lease and how quickly you need to move in. In New York City, the standard lease term is 3-5 years, and companies need to plan 3-9 months ahead of their desired move-in date. There are always properties available for immediate move-in or on short-term or flexible leases, but the options are limited and likely more expensive.
In some cases you may get a landlord willing to push a 3-year term down to 2 years, but 3 years is usually the shortest lease most landlords are comfortable with. If you need a lease term shorter than 2 years, you should consider the sublease market.
There are three main types of commercial real estate leases: gross, net, and absolute. The lease you sign will determine how much you’ll pay for building operating expenses, maintenance, insurance, real estate taxes, and more. Your leverage in entering a full-service lease, where the landlord covers all these costs, depends on your hedge fund’s financials and willingness to commit to a long-term contract.
In addition to what type of lease you enter, you’ll have to choose what kind of office space you want. Popular hedge fund office space options include:
In addition to offering shorter, more flexible lease terms, office subleases tend to have cheaper rental rates than direct leases. That means you can find office space in a Class A building in a neighborhood like the Plaza District without settling for a Class B building.
If you plan to make improvements to the space, the leasing tenant may be willing to undertake the work on your behalf, provided the renovations are not too extensive. Otherwise, you should prepare to fund and manage this work on your own.
Many hedge fund office sublets come furnished. If you have a rapidly-approaching move date and you’re looking for turnkey space, working with a broker to narrow your search to furnished offices may be your best option.
The advantage here is you’ll devote fewer company time and resources to thinking about layout, furnishing, and decor. If you don’t have an executive assistant, office manager, or trusted operations manager, it may not be worth pulling an analyst, engineer, or manager away their core tasks to own moving logistics. The downside is you’ll have less wiggle room to customize your space according to your brand.
If you know how many private offices and meeting/conference rooms you need, a broker may be able to find an office space that doesn’t require any construction work. For most hedge funds, this is an ideal situation — faster move-in and fewer costs.
Depending on the neighborhood and landlord, pre-built hedge fund office space will usually include:
If you want more custom layout for your hedge fund’s office, a fit-out (also known as a build-out) is likely your best option. You’ll have to coordinate with an architect, interior designer, and construction project manager (your broker or landlord will help you find qualified professionals), and budget a few extra months before you can move into your new space.
The advantage of a fit-out is the opportunity to create a truly unique office space you and your team can be proud of. This can go a long way towards keeping morale high, building a brand, and impressing clients. Common build-out features include conference rooms, private offices, smaller meeting rooms for one-on-ones, kitchen spaces, and reception areas.
Construction projects aren’t cheap, but your broker may be able to negotiate a tenant improvement allowance (TIA) with your landlord. Depending on your willingness to commit to a longer-term lease, these construction costs can be offset with anything from 1-2 months of free rent to a turnkey build-out, where the landlord covers all renovation costs.
An experienced tenant broker will make your move-in process faster and cheaper. They will help curate your search based on office specifications, location, and budget, so you only tour spaces that fit your needs. Additionally, a tenant broker will help negotiate the details of your lease, including lease term, move-in date, rent, construction costs,TIA, and other operating expenses.
If you’re ready to start your hedge fund office search, fill out our short office space questionnaire, and we’ll connect you with an experienced broker right away.
SquareFoot is a new kind of commercial real estate company. Our easy-to-use technology and responsive team of real estate professionals delivers the most transparent, flexible experience in the market. Get in touch to start your search today.