The pandemic and its impact on the way we work has prompted many commercial occupiers to question their real estate footprint. One of which is whether the current size of space is appropriate to accommodate working patterns, which have significantly evolved over the past 24 months and will continue to do so in the short-to-medium-term. In many cases this has led to businesses disposing of part or all of their space. This has given rise to a significant level of second-hand office space flooding the market in both 2020 and 2021. Couple this with the release of more landlord space and the environment for leasing just got that more competitive, which is not expected to ease as we head into 2022.
A lifting of ‘Work From Home’ guidance from the government will see a gradual return of workers back into offices. This will give business leaders the opportunity to further assess space needs, which could well lead to a further influx of occupier disposals. For many this can be a testing time, especially as workplace change can impact several parts of a business. Dealing with a space disposal can be time-consuming and daunting, to support you from the outset I have put together a short do’s and don’t list to ensure a successful letting.
BE REALISTIC
It is no surprise that the majority of occupiers disposing of space want a quick transaction, however by having realistic expectations from the start, especially in the current climate, will result in a smoother experience. Whilst the length of time taken to lease is important, other factors such as rent, costs of disposal and legal work should also be factored in at the earliest point possible. Being ‘disposal ready’ at the start, will save time in the long-run.
READ YOUR LEASE
Not all leases are the same. The provisions for disposing of space can vary. It will stipulate how you can dispose of space, by what means (sublease or assignment), sometimes how much space can be disposed of and who to are covered in a lease. Ensuring that you know what your lease covers will help manage expectations from all parties. Appointing an advisor at the earliest point possible to support on this will cut down on possible delays further down the line.
APPROACH YOUR LANDLORD EARLY
Landlord consent is required for the vast majority of office disposals by a tenant, therefore opening dialogue early is important. In some cases, reaching out to the landlord in advance could unlock other avenues such as taking the space back or they know of interested parties elsewhere in their portfolio.
Reaching an agreement will enable you to formulate a comprehensive letting strategy, not just with the basics of can you dispose of your space, but also the potential provisions (or restrictions) for an incoming tenant such as fit-out works etc. Having an open dialogue with your landlord or their representative is another element that ensures a smooth process.
THINK LIKE THE FUTURE OCCUPIER
It is important that you put yourself in the mindset of the acquiring party when marketing your office space. What would you want to see and know when you arrive, which office elements will stay or go? For many the attractiveness of second-hand space is the existing fit-out, which reduces the initial capital expenditure outlay for an incoming tenant. To ensure that your space stands out from other being marketed be prepared to leave as much in-situ as possible.
FINALLY, BE STAGE READY
Secondhand space can often be poorly presented given that sometimes the space is still being used. Whilst it remains a working environment, be aware that other competing spaces will either be a blank canvas or ‘staged’ for marketing. Prospective occupiers will be quick to reject a space on the basis of presentation, as it is difficult to look beyond what is on display.
Here are some easy wins to help make your space more presentable:
- De-clutter desks as much as possible
- De-clutter the space to enable clear sight lines of the office
- Ensure coats and other clothing items are removed from chairs
- Keep the kitchen and breakout areas tidy – do not schedule viewings at lunchtime
- If the space is not in use – maintain the space, water the plants and keep windows clean
We are acutely aware that disposing of space can be taxing for businesses, in time, energy and even cost. Ensuring you are fully aware of the benefits and pitfalls of the disposal process is our priority. 2022 will see many businesses review their real estate strategy, we are here to support you in achieving the best outcome.
For our full list of available office spaces visit www.devono.com.
