For architects, it all starts with choosing the right space.
In the past year alone, I have negotiated architecture leases including OMA, HOK, 1100 Architect, the Department of Architecture at Cornell University, studioMDA, and 212box.
Of course, my firm's track record with architects goes back further than just this past year. In 2001, we represented The American Institute of Architects (AIA) New York Chapter in its purchase of the Center for Architecture at 535 LaGuardia Place.
I myself am a former principal of SITE, the architectural design firm that made a name for itself by creating a series of fantastic buildings for Best Products Company in the 1970's and 80's. I am a recipient of the Rome Prize and the Chrysler Award for Innovation in Design.
Sinvin's success with architects extends to working with them to find the space for their clients that allows them to utilize their creative talent. In addition to architectural firms, we specialize in creative and design-oriented organizations--like Vitra, Blue Man Group and post-production houses The Mill and @radical media.
I understand that a work environment must be functional, affordable as well as a symbol of its occupants' creative capabilities. For that reason, choosing space wisely is one of the most important decisions you can make as an architecture firm.
Renowned architect Michael Graves says it best, "In any architecture, there is an equity between the pragmatic function and the symbolic function."
Whether seeking space for your own firm or for a client, the first important step is to develop a clear policy on space that takes into account the firm's goals. You may want to emphasize certain elements of the corporate image, move physically closer to clients or employees, or improve the working environment. You should also consider size, natural light, layout, after-hours needs, and budget.
Architects no doubt understand the challenge of leasing and building out a creative space. It's imperative that you hire a team of seasoned professionals to help you stick to your schedule for finding, negotiating for, and ultimately moving into your space.
Besides the engineers, IT experts and contractor--all familiar to architects--you may also need a broker and an attorney. The earlier these professionals are involved in your company's integrated space search, the more value they can add.
Working with a broker in the current tight market, for example, will put you on a better footing when negotiating with a prospective landlord. A broker can help your company understand the market and more effectively compete for desirable office space in the current period of limited availabilities.
Once your space requirements are clear, your broker will help you arrive at a shortlist of four to six properties that meet most of the criteria. For each property on your shortlist, you should consider square footage, loss factor, asking rent, occupancy date, cost, expansion and lease extension options, location, power supply, HVAC control, hours of access, IT requirements, safety and special requirements.
The final shortlist will include two to three properties. Next, you should conduct a financial analysis for each prospective lease. You will want to consider every projected occupancy cost, including build-out and relocation costs. You will also want to think about costs associated with leaving your existing location, such as restorations costs and penalty payments--if they apply.
In the final stage of the leasing process, you should be prepared to submit offers on more than one space. In a tight market, there are generally several parties competing for the same space. It is always good to have a backup in case you are not able to lease your first choice. Your broker will work with you to prepare and present offers for the prospective lease on your properties of choice, negotiating a number of lease items including free rent, possession date and workletter.
Once all parties have agreed to lease terms, your broker will prepare a term sheet and forward it to your attorney. The key to getting the most benefit out of the free rent period is to do as much up front work on the space design and layout as possible, while the attorneys are finalizing the lease documents. This will keep you ahead of the curve and can sometimes result in an extra few months of free rent.
MICHELLE STONE, MANAGING DIRECTOR, SINVIN REALTY CORP.
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|Title Annotation:||Commercial Sales & Leasing|
|Publication:||Real Estate Weekly|
|Date:||May 3, 2006|
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