Whether you are looking at leasing or buying commercial property, establishing and understanding square footage needs of your business is essential. The process starts by first being honest about the current and future needs of your business: Should you think big? Or, is thinking smaller better?
In some cases, a business would thrive in a smaller commercial property and utilize space, then expand to different locations when ready. Other cases, companies have enough potential growth where growing into the office is a manageable endeavor. Let’s discuss the advantages and disadvantages of getting either a large or small commercial property to help with understanding square footage.
Understanding Square Footage: Go Small
For relatively new business owners, start small when it comes to leasing commercial office space. When business is uncertain taking on a smaller space has smaller consequences. Small business owners should seek out not only a smaller square footage commercial space but also seek out a shorter lease term.
The benefits of getting a smaller square footage commercial property are pretty obvious – smaller spaces cost less. Understanding square footage doesn’t have to do with understanding that the extra space you are paying for doesn’t just end at the rental fee. The increased space costs increase electricity to power and extra heat to warm the extra space. Newer businesses also tend to have a smaller staff and less equipment – all the more reason to look for a smaller commercial space.
Understanding Square Footage: Going Big
When searching for a bigger commercial space there are pros and cons associated, but by understanding square footage needs of your company you can put yourself at an advantage. If you are a business with potential growth you would be better suited in a larger square footage commercial space because you will have the opportunity to grow. As your business, grows you can simply utilize your extra space. The larger commercial space allows you to add new equipment without overcrowding staff members. You are given flexibility to add meeting rooms, create more spacious waiting areas and increase space for other amenities.
When it comes to leasing a larger property you are more likely to go after a longer lease period. But there are more advantages than just not moving often. A longer lease period gives you not only more stability it gives you some negotiating power when figuring out your lease. There is increased stability with a longer lease because you know your business has found a home for quite some time. You are assured that the money you spend on advertising a location will not be obsolete after a few short years. Landlords are usually willing to charge lower rent per-square-foot, because they won’t have to spend time searching for a new tenant after just one year.
Analyze your Business
Whether you are looking for lease length or understanding square footage, you first have to assess the current and future of your company. How much will you grow in the next year? What about in the next 5 years? Do clients regularly come to your office, or does most of your client interaction happen through email or over the phone? Will you need a larger staff in the upcoming years? Having a handle on your business is a must before looking for any size square footage.
If you need help understand square footage needs for your business give us a call. One of the strengths of S&D Realty is our ability to evaluate real estate in terms of highest and best use, feasibility and investment performance. For more information on investing in commercial real estate, don’t hesitate to give us a call at 516-248-6905. We look forward to hearing from you!
