Office Building Comparisons

Before a Tenant makes the final decision on staying or moving, the dollar-per-square-foot costs need to be compared along with other benefits that the tenant may receive. Newer office buildings often fill up at the expense of older office buildings. Because new buildings cost more to build, rental rates will be higher.

In many areas, there are still many vacancies reported in office buildings. Most of the available space is in newer buildings. One of the most important jobs the leasing agent of a building with available space is to analyze other buildings to see if a Tenant could be persuaded to move.

Here are a few things to compare:

1. Time factor. In a business’ expansion, they may have expanded to different floors or different buildings as more space was needed. There may be a significant loss in employee time due to the inconvenient layout through expansion at an old location.
2. Don’t assume that the new space rentals are not competitive. Cost-of-living clauses in the tenant’s existing lease may have escalated the rent level up to the costs in the newer, more modern building.
3. The newer building represents more efficient design and is modern in every way. The intangible improvements in employee morale and efficiency may overcome the slight difference in dollar-costs per month.
4. Finally, a change in location to a more, prestigious building in a scenic part of the community can contribute to the reputation of the tenant and ultimately to the profitability of the business.

The tenants who could profit from being at the new location will usually not be aware of all the benefits of a move until they are given the opportunity to make the comparison.

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