We peeled back the hood of a time sensitive lease negotiation
One of the more common challenges in the tech commercial real estate pursuit is time. In CRE time is considered a best friend in leveraging negotiations. But sometimes time is just a luxury. With a ticking clock due to business operation requirements, recruitment needs, or client delivery due dates, it’s no surprise a typical response to commencement timing is “ASAP.” As an effort to break down potential opportunities to still maximize negotiations while dealing with a limited time frame, we peeled back the hood of a recent (and successful) lease negotiation where we were under pressure for an immediate move-in date. Bring @SES-Imagotag to the picture.
In this “ASAP” commencement, the rapid growing tech user approached us needing a ‘next day move-in‘ office requirement, with the other traditional tech caveats that are a-typical in the commercial real estate community (i.e. term flexibility, growth/contraction options, minimal upfront security, below market rent costs, short-term, furniture, etc.). Not only did they achieve much of the above, but securing an office in under thirty days was the prioritized accomplishment. So after digging in to the case study what did we uncover?
- Hit the Ground Running: Instead of going to the market inquiring about immediate, existing and leverage(able) spaces after the initial ‘kick-off’ meeting, having an ongoing list of spaces that met SES’s requirement on day one cut the information gathering time to essentially no-time at all. Maintaining a survey of product in the marketplace that meets many of the above traditional tech requirements that is updated daily was and is a major time-saver in this “ASAP” commencement.
- Cut to the Shortlist: After understanding SES’s requirement and ‘hot-buttons’ we previewed the above survey without the client. From there, we were able to cut tour times which typically are one to two full days down to just a half day. This also allowed the option to share digital examples of availabilities from the clients office to proactively answer questions that usually follow the on-site building tours.
- Pre-Negotiated Proposals: With an immediate requirement, we negotiated each of the short-listed spaces prior to touring, so SES would have bottom-line numbers for their budget as they were visiting each space. This provided a real-time decision capability, and cutting our negotiating process from weeks to a day or two.
- Contract and Move-In Services: Prepping the team of furniture vendors, the legal counsel and move managers when the short-listed spaces were selected gave this team a head start on their paperwork and due diligence. The typical move management and lease contract negotiation process can take one to two months. Prepping this team with the project prior to selecting a building/space can limit this window to a couple weeks.
- Failsafe: At times negotiations will inevitably fall through. And the worst possible time for a space that is thought to be secured to turn as non-available, is during a time sensitive negotiation. With the SES project, we negotiated two spaces to the 11th hour, should we require a backup. Both spaces were comparable in cost, location and build-out. Turns out we did need to rely on both spaces, as one fell through at the last minute. Without pursuing both negotiations we would have been back at square one.
I’ve included pictures of the final product for SES below. Congratulations on your Chicago office and continued growth! The space includes sit-to-stand/standup desks, a collaborative kitchen, conferencing and huddle rooms, and elevator ID.
For questions on “ASAP” commencement, as well as the CRE process, your office, or a specific building or trends in the market, I can be reached HERE.