This originally appeared on Minnesota Business where Jason Sandquist contribute articles regularly about commercial real estate and business.
It’s something that no business owner wants to face, after all most business owner’s think their first location is their last. Times change along with people and business that make for challenging decisions.
Relocating a business or moving is one of the biggest stresses around and if not done properly can leave your business handcuffed. Unlike a Broadway play, there really is no way to rehearse.
Moving a business does come with some short-term costs, whether moving costs or employees leaving because of distance and rehiring – the list is long.
Reasons For Moving Business
There are many reasons that a business might pick up and move its operations to a different location. Given the current economic conditions, many businesses are moving to different locations and taking advantages of lower rents. Something they might have not been able to get into a few years ago comes into play. Newer building, better amenities for employees, larger space for cheaper than current rent; the list could go on. Businesses are also downsizing or working on renewing leases to lower rates to better allocate funds.
Maybe you thought your landlord was on your side but now they decide to raise the rent on your current lease. Maybe your business is bursting at the seems in a tiny space and you’re trying to get every inch out of your current space. Saving Getting closer to your core business users like customers and vendors is another reason that you might decide to move.
Be Realistic and Do Your Homework
Nothing’s worse than having a few good months of growth and deciding to move into a new shiny corner office that with a 5 year lease and realize you bit of to much. Budget accordingly so you can support the new lease that you signed.
Understand the location that you are interested in relocating to. Even if it takes a year or two until you decide. You’ll be there for a while and you want to make sure the location is perfect.
Here are some quick thoughts to take into consideration when trying to decide if a move for your business makes sense. Tour property with tenant rep and take notes of each properties characteristics to minimize as much risk as possible. If traffic is important, make sure to get a traffic count on the number of vehicles that pass by each day. The cost of the rent; is it a gross service lease where every thing is included or something like a triple-net (NNN) that has a base price plus the tenant is responsible for taxes, insurance and operating costs. What are the build out costs for the space going to be? Can this be negotiated with the landlord paying some or all?
Is there space for growth? What are the condition of surrounding buildings or traffic?
Does the landlord carry a good reputation? Just like the saying “A happy wife is a happy life”, you could relate this to a landlord-tenant relationship.
Plan, Plan, Plan
The moving date will sneak up and fast.
As the business owner, you like to do everything yourself. Probably not a good idea in this situation and delegation of tasks is the way to go.
Create lists that tell everybody the plan; 3 months out, 2 months out, 1 month out, then weekly if need be all the way down to the day of move. Breakdown responsibilities for every employee ranging in tasks from paper plates to web servers.
Most companies now rely heavily on internet connectivity. Seek out the correct IT advice to ensure everything is working properly the day you need it to.
One of the best resources to ask is other business owners that have been through the process, they can answer a lot of questions. Their input could be the greatest because they’ve survived it.
Make your move rewarding and important step towards the growth of your business endeavors.
This originally appeared on Minnesota Business where Jason Sandquist and Ladin Ventures contribute articles regularly about commercial real estate.
The story goes like this
You thought you would make it easy on yourself when looking at property. Driving around for hours searching for the right property for your business and realized its not the same as looking for residential home. Data and information is impossible to come by and realized the industry just hasn’t evolved. You didn’t want to bother anyone to show you property so instead you went straight to the listing agent. The deal gets done but not to your liking, you realize you just got screwed.
In today’s ever changing commercial real estate market, businesses need direct access to the best information available. No holding back. It’s a constant battle as both sides grapple for the upper hand when it comes to negotiations.
Why Tenant Rep
If you are unfamiliar with what a tenant rep, the best way to put is someone that only exclusively represents tenants or business owners. Conflict of interest is inevitable in a real estate transaction. Why mess around with it when it comes your livelihood?
A good tenant rep is not only skilled in negotiation but also well educated with current market conditions. Are some areas of the commercial sector struggling right now, sure. Some might not be as bad off as a lot are making it seem. As with all, its local. Maybe the office market in Minneapolis outperforming the St. Paul? Would you get this information if you went to a listing broker in a Minneapolis high-rise and wanted to know about a property in St. Paul? Your odds might be higher at the blackjack table.
Some Tenant Rep advantages
Strategic planning and financial analysis are many roles that a tenant rep has. We can provide help with decision making in complex business environment to help you decide if you need to relocate or renegotiate your current lease and expand or downsize.
See ALL the properties! Not just ones the listing broker wants you to see. Broaden your search that fit your business objectives.
A tenant rep has fiduciary responsibility to your business and no one else. You would never have an attorney represent both sides of case or you hire a CPA for your financials. Bringing on a tenant rep to help navigate your business in the complex real estate transaction almost seems like a no brainer.
Can save you time and money by allowing you to focus on your business and customers.
Provide an in-depth market analysis to make sure all needs are fully met. Present and future. There are lots of variables that can impact market conditions that need to be examined (ie: foreclosures, new developments, landlord motivations, et al).
Advise in the best lease terms, rental rates, free rent, expansion and renewal options, construction or tenant improvement allowances, much more.
Money In Your Pocket
Saving money to invest in other places. Isn’t that what all owners like to hear? Maybe by using a tenant rep you can save your company $20k, $50k or more, then allocate costs to sectors of your business that matters. Don’t waste the time by trying to do it yourself, focus on what matters which for most business is the companies bottom line.
Most tenant rep fees are paid for by the seller or landlord at closing, just like a residential transaction. You could argue over the course of the lease the tenant will pay but landlords have all these costs already worked in. So easily put, no up front fees in most cases. However, make sure you fully understand where the fees are coming from before signing anything.
So here’s my question: if a tenant rep can save your business occupancy costs over the terms of the lease (sometimes up to 40%), then isn’t it worth it?
If you have a few minutes or 12 to be exaxt, the television show 60 Minutes aired a segment this past Sunday on walking away from your mortgage or the real estate term of 2010: Strategic Default
Can’t think of a better way to roll into the weekend than meeting new people, enjoy some great local craft beer from a company that is growing and getting a lot of press and have some appetizers from another great local company.
The cost is $10 for all you can drink and eat (within reason of course or until it runs out).
The actually have a good search engine that pulls in a bunch of data based on certain criteria that tries to put together the best neighborhood in the Twin Cities metro area and that neighborhood just happens to be Lake Shore Park in White Bear Lake located on the south east tip of the lake.
Per Neighborhood Scout the area has a median home price of $252,175 in regards to the premium homes in the metro area of $547,499 which comes out to a discount of 54%.
Undervalued neighborhoods / towns are areas that combine educated neighbors (a powerful indicator of overall neighborhood quality), safety from crime, excellent public schools, and a high proportion of larger, owner-occupied single-family detached homes, in the price range you want, and in the location and setting you choose. Homes in these areas are generally great deals and much less than they are really worth.
Be aware that the data is not used from zip codes but areas, so the information might be a little misleading if looked at from a different perspective.
The event was a blast and if you haven’t made it out to one yet, sign up on the SMBMSP site for notifications. Hopefully will see you at one in the future.
Sure I was guilty by leaving a phone message saying I have a client that *might* be interested in writing an offer and needed more information about the property.
14 phone calls in 30 minutes is a bit ridiculous and quite obnoxious. Desperate, starving, the list could go on.
I could have answered but I was in the middle of a meeting, after awhile I kind of just wanted to see how long the show would go on. I finally answered after the 14th and said “please stop I will call you back when I have a second”. I’m sure it could have gone on a lot longer.
Jeff O’Brien pointed this out to me today, here’s a laugh:
The TractorWorks building located at 800 Washington Ave in the Warehouse District is one of the best redevelopment projects that I have ever seen. It is definitely one of the premier buildings in Minneapolis for creative office space and there isn’ much square feet left.
To understand its prescence first look at the past. The building used to be home to Deere & Webber Co (Deere being John Deere Tractor factory) and is listed on the National Register of Historic Places.
The redesign of the building fits that entrepreneurs and start ups, contemporary but not leaving the historic past. The hallways are wide, the flooring is concrete that stands out from the creative lighting that hangs from open timber ceilings. Many of the fixtures are oxidized steel and the doors are frosted.
TractorWorks Amenities
Secured, covered, connected parking ramp
Visitor parking (metered
16′ Windows with views
Onsite Management
Rooftop Deck overlooking Downtown Minneapolis
Fitness facility on site: North Loop Fitness
Two world class eateries: Be’Wiched and Bar Lagrassa
You can bike to work and store it
North Loop Neighborhood
The Warehouse District has exploded in growth the past decade, but has seen its share of declines as well. The North Loop’s current revival started with Minneapolis condos and now with old warehouse buildings being converted into usable office or condominiums along Washington and the riverfront.
Fast forward to present time and Target Field is just a few baseball throws away and the Northstar Commuter Line will be bringing more people into the area.
Businesses and Tenants, no better place to start than here.
If you’re looking to lease office space in the TractorWorks building, reach out here.
Two months ago I did a short video about some vacant commercial properties in Rosemount, turns out someone probably viewed it and acted on it. Wireless Zone which is an authorized retailer of Verizon Wireless opened up a store I just noticed when passing by today.
Located in the endcap unit of Rosemount Village Center where Quizno’s used to be located, this store should do well here. Lots of traffic from County Road 42 and should pick up quite a bit of foot traffic from Cub Foods, Caribou Coffee and others in the area.
It’s something that no business owner wants to face, after all most business owner’s think their first location is their last. Times change along with people and business that make for challenging decisions.
