Site Acquisition: How to conduct a commercial property inspection
When you are looking to rent a commercial office space you inevitably need to carry out multiple site inspections. This article prepared by our site acquisition specialist provides tips on how to prepare for a commercial property inspection.
Liberty Leasing consistently seek to provide helpful literature to doing a DIY site acquisition process. We want to empower you to find the perfect premises that reflects your brand / culture and supports future business growth.
When to start looking
The site acquisition process can be quite time consuming. Tenant’s scour the internet for potential properties, make a shortlist, contact (and follow up) agents and arrange for various inspection times.
Because this process requires so much dedication, it’s imperative that you commence the search with plenty of time before your desired commencement date. Our site acquisition specialist generally recommends allowing for 12 months however a number of variables can either increase or decrease this ‘plenty of time’ estimate. A failure allocate enough lead time may result in taking a property that is less than ideal, simply because of time pressure. Given the significant financial investment that a lease requirements make sure that you budget the time for this process.
Define your requirements
At times the property market can be over saturated with commercial properties for rent. This can make it quite overwhelming to filter through properties for shortlisting. Before commencing your search be sure to identify what is it that you need from the premises. For example:
- Location: Define the area for your search
- Budget: Identifying your budget takes some work. Ensure that you research the market in your location to make sure that your budget and the current market will work nicely together.
- Size: When determining how much space you need, consider any potential future growth plans, server room requirements etc.
- Car parking: How much car parking do you require? If your location is not central you need to factor staff car parking.
- Building amenities: Do you require amenities / commercial tenancy services such as on site-cafes or end of trip facilities?
- Signage: Do you require any signage? This may include lobby signage, directional signage, roof signage etc.
We also recommend that you take the time to consider the overall leasing strategy for your business. This may include the optimal length of the lease, early exit options or creating a cohesive brand across multiple locations. Our commercial Tenant representation providers develop, and execute, property strategies for Tenants which can be particularly helpful for businesses that intend to have multiple sites or envision substantial growth over the next 5-10 years.
Size of the Premises
As you conduct your inspections ensure that you request a floor plan from the agent or Landlord. This should confirm the lettable area of the internal premises. Ensure that the useable area matches the advertisement and review the plan carefully to ensure that you aren’t paying for space not being utilised (such as fire stairs).
Preliminary Fitout Plans
As you may have picked up on by now, attending a site inspection requires some significant prior preparation and planning. This includes your fitout. Before attending a site inspection for your shortlisted properties, you should have prepared preliminary specifications for your fitout. For example:
- number and type of work stations (e.g. standing desks compared to hot desking have different space requirements);
- number of internal office and meeting rooms;
- space required for the design of reception or client waiting area;
- server room or communications requirements;
- storage needs; and
- break out / kitchen design.
Once you define your requirements it will become easier to identify how much of the existing fitout may be reusable or whether the overall the premises layout provides a good base for your preliminary fitout plans.
Note that the larger Landlords will generally have a fitout guide which sets out some pretty specific requirements for any works carried out in the building. This might include overall building standards, material to be used etc. Ensure that you ask the agent at a site inspection whether there is a fitout guide. If there is make sure that you provide this to your fitout contractor and they are aware of the requirements – this will avoid potential commercial leasing disputes during the plan approval stage.
Preliminary Fitout Cost
Whilst you are preparing preliminary fitout plans you should also be gaining an understanding of cost. The overall cost is going to depend on any existing fitout and the layout of the potential premises. However, once you have both of these scoped out, it will become easier to compare the layout of potential premises insofar as they relate to potential fitout costs.
Be sure to ask the agent whether there is a landlord incentive or rent reduction available to assist in offsetting the fitout cost. Whether this is available generally depends on the current market within the location you have selected.
Base Building Services
During your site inspection ensure that you check the base building services. This includes big ticket items such as air-conditioning, lifts, fire systems etc. Some key questions to ask the agent or Landlord include the age of the air-conditioning machinery, whether there have been any major repairs recently. If you are within a building that regularly has broken down air-conditioning or lifts it could be detrimental to your business and possibly lead to business interruption disputes with the Landlord.
These conversations are particularly imperative when you may be leasing something outside the category of an A Grade building.
Make enquires with the agent or Landlord as to the council zoning within the area and whether your proposed works may require a development approval. Development approvals can be quite costly so you want to confirm these requirements at the outset. It will ultimately be your responsibility comply with council requirements so make sure that you confirm the Landlord’s position with your own investigations. If you are not sure how to conduct these investigations, contact a site acquisition specialist or engage some broader commercial Tenant representation.
Refer to our article ‘A Critical question: Is your Premises fit for purpose?‘ for more information on this point.
The site acquisition process requires serious preparation and planning. A failure to do so can have meaningful consequences such as:
- your fitout cost exploding because you didn’t consider the existing layout;
- lower staff retention because of the location or lack of car parking; or
- having to end your lease early because you didn’t consider an expansion plan.
The site acquisition specialist at Liberty Leasing is available for provide you with professional advice. Alternatively, we can carry out the entire site acquisition process for you. You can get in touch with Liberty Leasing on (07) 3359 8273 or book an appointment online.