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Practice Management

: Chuck Newton

Is It Time To Look For Office Space?

By Chuck Newton

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Everybody knows that I am not a big fan of commercial office space. I tend to look at it as a long term debt with the build up of zero equity -- no benefit. That is not always a good investment. Also, rent (debt) takes money out of your pocket that broadband and a home office can allow you to keep. Office rent is such a large percentage of any law firm's cost, that is a lot of money.

That said, I also understand that many people do not share my experience, or simple cannot or will not move home. They also do not want the hassles of financing, managing and paying for ownership of a law office or commercial property. Simply put, that is not the business in which they operate.

If you fall into this latter category, and you are looking to go out on your own, move your office, expand or downsize your office, or need a new office for any reason, now might very well be the time.

Although not as hard hit as residential real estate, commercial occupancy is falling. This is true for venues once with a waiting list. As a result, not only are you more likely to find the location you feel you really need, but more likely than not you will find yourself in the driver's seat in terms of negotiations. We are finally getting back to a time where landlords will deal to get their space filled. Most commercial properties do not have long term financing like you would suspect to obtain when financing a house. As a result, they need to re-up for new financing in the future and they need leases and their spaces full. Tenants now are getting free months, reduced costs, moving expenses paid, and the like.

The same is true for executive suites. Let us face the fact that when commercial space goes unused, landlords increase the number of executive suites to fill the space, creating an over abundance of executive suites.

You still need to rent or lease space that makes sense for you. After payroll, office space is usually the second highest expense for most law firms. Think carefully about how much space you really need, where it should be located, what type of space it should be, and what key features you need.

Full post as published by Chuck Newton on September 27, 2008 (boomark / email).