1. When is the right time to evaluate my office lease obligations?
2. What is my real cost of occupancy?
3. How can my real estate attract and retain employees?
4. As a real estate professional, how can you add value?
5. How are we compensated?
6. What is a CCIM?

1. When is the right time to evaluate my office lease obligations?

Since real estate is generally the second highest business expense after employee costs, the opportunity to negotiate favorable financial leverage and operating efficiency is critical.

As with all businesses that are subject to changing market conditions, timing is everything!

Because most office building leases or purchases are long-term commitments, the current and future market trends should be analyzed when evaluating lease obligations. With many leases requiring a minimum of a year or more to exercise an option to renew or even longer to negotiate a relocation to another building, the timing of when to initiate negotiations should not depend on the termination date, but should depend on a company’s projected needs and whether rental rates are, or will, trend upward or downward. We continually study the market and counsel our clients on the best time to commence any negotiation.

2. What is my real cost of occupancy?

Or, more accurately, what really is included in the cost of a square foot of office space?

All too often, only the obvious aspects of a leasehold obligation are considered by tenants. That is: rental rates, tenant improvements and parking costs. However, these items are only part of the overall financial picture when negotiating a lease or buying or selling a building.

When we represent our clients, we focus on the physical and functional, as well as the economic aspects of a real estate decision. For example, the overall physical shape and design of one building versus another can dramatically affect the cost of utilities as well as how much actual square footage the tenant will need to occupy and how the tenant’s “usable” area compares to “rentable” space.

A tenant or owner must also weigh functional issues of a building, including the building currently occupied. If a building or the tenant’s space is functionally obsolete, due to design, governmental regulation, or age, the “all-in” cost to update or refurbish the building or premises could be cost prohibitive compared to another alternative.

3. How can my real estate attract and retain employees?

Regardless of the state of the economy, competition for the recruitment and retention of the highest quality, skilled talent can be the most challenging management objective.

With Houston’s constantly changing infrastructure and transportation issues, the effect on the decision of a location for a business is critical, especially since external circumstances can change dramatically during the term of a commercial office lease or period of building ownership.

We begin a negotiation by analyzing the demographics related to a company’s current and future labor pool, and how it is impacted by proposed transportation routes and other commercial development plans. Additionally, we compare “best practices” by industry as it relates to employee amenities such as type and quality of residential neighborhoods, health and wellness facilities, quality of schools, and access to retail and dining facilities and clients, just to name a few.

Recent studies indicate that over 41% of employees claim that the quality of the workplace influences their decision to accept a position, while 51% state that the physical layout of the company’s office space has a strong influence on attitude and remaining within a job. Second only to compensation, over 73% of employees claim that their physical workplace is the area that most needs improvement.

Bottom-line: the image and quality of your company’s workplace is critical to attracting and retaining top employees.

4. As a real estate professional, how can you add value?

As with any major business decision, insight and expertise assure the best results in a real estate transaction. We provide a detailed knowledge of the process gained through extensive experience with such factors as office space design, operating and expense escalations, regulatory issues, expansions, government regulations, and concessions and technology applications. We save time, money and protect against unexpected costs.

As your real estate advisor, we can leverage your negotiating strength through a careful study of the market and our vast pool of experience and relationships from which to draw. We add value to your business by increasing its productivity through identification of skills and delegation of processes to moving consultants, engineers, architects, project managers, and contractors. We know who delivers on time and on budget through first hand experience.

We have a well-established track record in the industry which guarantees our clients that we have successfully represented other firms with similar issues and requirements.

5. How are you compensated?

To represent a third party in a commercial real estate transaction, the individual must be a state licensed real estate broker. This is especially true in Texas, where the brokers are governed by the Texas Real Estate Commission.

Licensed commercial brokers tend to specialize in certain areas of expertise, such as Office, Retail, or Industrial properties. Additionally, they also focus that expertise in either Owner or User representation. With the exception of certain types of specialty consulting work that is usually fee compensation, brokers are paid a percentage of a transaction.

Generally, the commission is paid by the Owner of the property in any transaction, and the commission is split between the Owner’s and User’s brokers. It is common practice that the tenant in an office leasing transaction does NOT pay the commission

A Certified Commercial Investment Member (CCIM) is a recognized expert in the disciplines of commercial and investment real estate. A CCIM is an invaluable resource to the commercial real estate owner, investor, and user, and is among an elite corps of 7,000 professionals across North America who hold the CCIM designation—the “Ph.D. of commercial real estate.”

Recognized for its preeminence within the industry, the CCIM curriculum represents the core knowledge expected of commercial investment practitioners, regardless of the diversity of specializations within the industry.

Following the extensive required course work, candidates must submit a detailed resume of closed transactions and/or consultations showing a depth of experience in the commercial investment field. After fulfilling these requirements, candidates must successfully complete a comprehensive examination to earn the CCIM designation. This designation process ensures that CCIMs are proficient not only in theory, but also in practice.

Only one percent of commercial real estate practitioners worldwide hold the CCIM designation, which reflects not only the caliber of the program, but also why it is one of the most coveted and respected designations in the industry.

CCIMs successfully complete approximately 156,000 transactions annually, representing more than $400 billion.

Certified Commercial Investment Members are in more marketplaces in North America – 12 CCIM regions representing 1,000 cities – than all major real estate companies combined.

The Commercial Investment Real Estate Institute (CIREI) is an affiliate of the National Association of REALTORS (NAR). The CCIM designation was established in 1969 and is recognized as the mark of professionalism and knowledge in commercial investment real estate.

World Wide Web: www.ccim.com