Spencer Group Inc., Realty Brokerage's blog

Underestimating the current condition of the office space.

This problem can be overlooked, and it is an easy mistake that future tenants can make.
Why?
They don’t think of the cost of a buildout for their improvements right off the bat.
A very simple example here: It can cost a lot of money for cables to be put through the walls or into the ground.

Another example: If the HVAC unit is outdated and running out of time, that will need to be replaced, taking time and money from your buildout costs.

A good idea: Try your hardest not to move into a space that is outdated to your...

Underestimating the power of negotiations.

Negotiations, negotiations…Tenants at times think the landlord holds all the power. This isn’t exactly the case.
They need tenants just like you to keep their building full and their investment generating the proper return.
If it’s empty for some time it is bad.
Such a situation sets them back.

Small tenants still have value as well. If there is a smaller space open that fits your needs, you hold even more value to a landlord.
If your company has a good financial record, your value is even higher.

After all - landlords and owners...

Making your decision based solely on price.

Price may be the most important factor, but is it really?
There are so many other variables needed to determine where your next office space may be.
It is important to know that if you value the price as your only factor, the other factors may come back and bite you.

Location! Location! Location!
It plays an important role along with commute patterns and the amenities that are in the building or surround it.
Do not choose an undesirable location and make a big concession in this area. It will affect your employees negatively.

Also –...

ABCs of real estate: The Most Common Mistakes Tenants Make When Leasing Office Space (6)

Choosing the wrong broker (or none at all).

We live in times, in which many folks think that checking the internet will ensure that their individual efforts will be properly rewarded.
Not in commercial real estate!
The right broker will be able to reduce your company’s bottom line and protect its interest throughout your lease.
A company’s office space is usually one of the top three biggest expenses it has. Don’t try to do it yourself.
Also - a good broker can improve deal terms by 10% to...

ABCs of real estate: The Most Common Mistakes Tenants Make When Leasing Office Space (5)

Incomplete documents inspection.

This is a lot of paperwork and tenants and requires careful consideration when signing.
Landlords think deeply about how to make as much money as legally possible on their buildings. Has it been inspected by a real estate lawyer?

Lease forms are sophisticated.
The longest leases are specifically made to get the landlord more money.
I advise that they need to be read by a professional.

Other ownership documents must be fully looked through as well.
What...

Real estate transactions may be scheduled to be completed by a certain time of day, depending on the wording of the Agreement of Purchase and Sale (APS). When the APS is silent on the time of closing, midnight may be the deemed deadline. This may mean that the transfer of the property won't be registered until the following day since land registry offices typically close by 5:00 p.m. The real estate lawyers for the buyer and seller often work cooperatively to ensure that the transaction closes the following day as soon as they are in a position to do so, even though not all of the closing...

Not Engaging The Market (this topic might be controversial).

Often, this comes with not planning enough or starting your search too late.
Negotiating in a vacuum is a bad idea.
You should check all your options and get a good feel for the market in your area. Only after that, should you go into negotiations.

You may be knowledgeable about the market in general but using that and not hard comparisons will be bad.
Calling properties in the area and asking for comps isn’t out of the question.
You should also be informed of amenity prices in the building or comparable buildings.
It...

Starting the process too late.

Give yourself enough time, probably more than you think you need. A good timeline should include a new lease signed six to nine months before your current one expires.
Start earlier on the bigger ownership groups because of the demand for their properties.

If you start it too late you will lose any leverage, you have in the negotiation process.
If time is running out on your company, you’ll need to focus on a smaller number of options.

Give yourself enough time to find multiple realistic options.
That comes back to hurt you in the negotiations...

Not Estimating The Right Amount Of Space

Some of this is because of poor planning and rushed searches, but it can happen without the right architect (or broker who brings his architect).
It can waste a company’s money on space or ensure there is no room to bring in new employees.

Using your architect to build out a plan and estimate the space needs is how you avoid this.
They can produce the estimations before you tour the market.
Predict your growth for the next three to five years and your estimated space can be planned properly.
Then, test fits can be made for each building...

Do you know what a power of attorney is?

A power of attorney is a legal document that you sign to give one person, or more than one person, the authority to manage your money and property on your behalf.
In most of Canada, the person you appoint is called an “attorney.”
That person does not need to be a lawyer.

There are three kinds of Power of Attorney in Ontario:|
• General Power of Attorney for Property,
• Continuing Power of Attorney for Property, and, 
• Power of Attorney for Personal Care.