Southcreek News

4 Ways A Lease For Your Office Rental Space In Kansas City Differs From A Residential Lease

There are a few differences between residential and commercial leases—leases used for housing and apartment rentals versus warehouse or office space rentals. Here are a few particular things to be aware of that differentiate a residential space from a commercial space, as outlined in “Differences Between a Residential and Commercial Lease”:

Laws about Habitability. When renting a residential space, landlords are required to provide a habitable space. If there is infrastructure, infestation, or heating problems with a space, the landlord is infringing on the tenant’s rights. However, this isn’t exactly the case for commercial space, although habitability could be a good negotiation point.

Protections. Because it is assumed that commercial tenants entering into a written contract have knowledge or experience in doing this sort of business, there are a lot less legal protections in place for the tenant than there are for the average residential tenant.

Negotiation. Negotiation plays a larger part in commercial leasing agreements. Tenants are expected to contact third party professionals to help give them insight for negotiating the price or incentives for the space.

Lease Agreement. Commercial leases are usually more unique than residential agreements. Most of the time they are designed according to the tenant’s needs and the amount of time the tenant plans on using the space. This could range from one year to five or ten years. These set lease terms are then up again for negotiation once the term is over.

Even though you might have some experience with personally renting residential space, it is important to be aware of the differences in a commercial lease and how you can use those differences to your advantage.

If you are looking for Overland Park office space, give a commercial real estate broker in Kansas City a call at 913-685-4100!

A Checklist for Your Overland Park Office Space

Leasing a space can be a very tiresome process. In order to avoid headaches and problems down the road, try using this checklist to make sure you are taking all the right steps before signing the lease, as described in the article, “Do’s and Don’ts for leasing a space.”:

Did you check how much space you need?

Every office has its own cultural habitat that needs a certain amount of room. Maybe your office space is looking for a more open workspace where employees can easily see each other and interact. Maybe you are better off with closed or sectioned off rooms for intimate meetings. Either way you will want to know how much space you need before picking the perfect spot. Remember if you lease a space that is too big it will feel empty—on the other hand, if you lease a space that is too small you might hinder your businesses growth. So consider the size and the necessity of important rooms before signing that lease!

Did you check prices elsewhere?

Compare! Compare! Compare! Looking at similar spaces in the same city is a good idea for anyone looking for office space. To truly understand the market one needs to find out what rate similar building with similar specifications are being rented for. Ignore any data about rental rates transactions that are over a year old. Check addresses, square footage, age and location, and then compare among places with similar prices.

Do you know who you are working with?

Remember when looking at office postings that the realtor is working directly with the landlord and wants to work to get a better deal for the landlord—this is their job. So in other words, don’t expect this realtor to help represent you in the transaction. Maybe look into working with a realtor directly who will help you find the best price for you.

Did you look for similar features and incentives?

When looking at spaces it is a good idea to look at a few different buildings. As outlined earlier, you are going to want to check prices and compare them to other buildings. However, this isn’t the only thing that should be compared when shopping around. You may want to look into what other business owners have received in terms of incentives from their landlords. Things like minor improvements or moving allowances are not uncommon among landlords who are looking to rent out space.

Are you sure the lease is correct?

It is never a good idea to assume that the lease is correct when signing for your new office space. Things that are said verbally might be left off the written lease or just completely forgotten by the landlord. New business owners who are looking for office space might look into getting a real estate attorney in order to save some money in the long run.

Did you get quotes in writing?

On top of making sure the lease is correct it is also a good idea to make sure you have all the quotes you were promised in writing. This seems like a no-brainer, but disputes about oral versus written agreements are not uncommon. You need to make sure to look at a few things before settling for a space, such as if the fees you are responsible for or rental rates change monthly. For instance, you might be looking at a space that is $5.50 per SF, but that rate could change to $25.50 per SF in the future, so just double-check before signing.

Do you understand the building zone restrictions?

Mistakes in zoning restrictions can end up being costly for you. Some places require a special permit from the city if you want to set up a retail business in an area. That means if you want to set up your new shop in the hip industrial area of town, you may need to sign up for a permit. So make sure you check with the building owner beforehand so you don’t have issues once you have already shouldered the cost of moving.

Did you read every line in the lease agreement?

Make sure to read every line in the lease agreement. Unlike residential real estate, there are no laws in place that protect you when signing up for commercial real estate. Make sure you know who is paying for what and how your money is being spent. Figure out who is paying for taxes, janitorial services, insurance, and even ground maintenance. Steer clear of verbal agreements and assumptions, and only focus on what is in writing.

Before signing the lease make sure you have checked all aspects of both the space and the document so you know exactly what you are getting!

If you are looking for Kansas City office space, give a commercial real estate broker in Overland Park a call at 913-685-4100 for more information about our available space.

4 Reasons To Think Twice About an Open Office Plan in Your Kansas City Office Space

There are many reasons to consider an open office plan in your office rental space: a collaborative atmosphere, savings on having to pay to rent more individual space for employees, the possibility of keeping an eye on all employees’ productivity throughout the day. However, there are a few reasons why this office space design has proven to be less than ideal for office workers. Here are a few facts to consider, as outlined in the article “Google got it wrong. The open-office trend is destroying the workplace”:

#1 Distractions

Studies have shown that many employees are affected by the distractions that accompany an open office plan through lack of visual and sound barriers. While the innovative, open atmosphere might give the illusion of productivity, in many cases the design has proven to take a toll on creative thinking, focusing abilities, and employee job satisfaction.

#2 Lack of Privacy

While employers might feel it is a benefit to be able to keep an eye on their staff, many employees in an open office plan do not thrive under the feeling that they are being constantly watched not only by their boss, but also by their coworkers. One study actually showed that contrary to the idea of better work coming out of communal environments, privacy can actually be a contributing factor to increased job performance.

#3 Interaction

One of the most touted benefits of the open office plan is improved ease of interaction. However, surveys have suggested that less than 10% of workers in any type of office cited communication with coworkers as a problem in the first place. If the need for inter-office communication was a non-issue to begin with, it calls into question the need for an office design that specifically aims to address communication.

#4 Illness

A seasonal side effect of an open office plan is the quick spread of disease among employees—one person comes in while sick and suddenly half the office is out of commission.

If you are moving into a new office rental space, the layout of your office is an important aspect to consider. While an open office plan is a cost-effective and trendy option, the actual benefits of this design are up for debate. Consider doing some research and talking to other employees or business managers about their experience with this type of layout before making a final decision.

Looking at office suites for rent in Kansas City? Give a commercial real estate broker in Kansas City a call at 913-685-4100 to set up a tour of a space!

6 Ways to Plan for Unforeseen Events in Your Office Rental Space in Overland Park

While there are a lot of issues that are very unlikely to happen during the course of your tenancy in an office rental space, such as natural disasters, accidents, or other sources of major damage to the property, it is best to consider those possibilities and their consequences when first drafting your lease. Here are a potential remedies to unexpected casualties to consider as you negotiate, as suggested in the articled “Planning for the Unexpected: Casualty issues in Commercial Properties”:

#1 Repairs

Even if it is unlikely that your office space suffers any severe damages throughout the course of your tenancy, there is a good chance minor issues will crop up occasionally, caused by weather or the natural wear and tear of a building. In order to prepare for minor and major damages, make sure your lease makes it very clear who is responsible for repairs, insurance, or replacing or improving any parts of the space. Don’t forget to factor in build-outs that might not be added until later in your tenancy.

#2 Lease Termination: Tenant and Landlord Rights

It is important to make sure that you will not be stuck in the lease in the event of major or partial property damage requiring repairs that will take a long time. Try to negotiate for permission to be released from the lease in the event that the timeline for repairs exceeds a reasonable amount of time, for example if it is going to take more than six months or a year, depending on the size of the space. Consider also what will happen if your landlord sets a reasonable original timeline, but unexpected delays occur and push back that timeline. Be clear about what the parameters are and if and when you can terminate the lease.

On the other hand, a landlord might to provide for their own right to terminate the lease if the damage to the space means that you as the tenant can pay a rental rate far below market value. You as a tenant want to avoid a situation in which the termination of your lease by the landlord is permitted if tenants in similar situations also have their leases terminated.

#3 Rent Abatement

It is common to include in a lease a clause allowing a tenant’s rent, CAM expenses, and tax payments to be reduced in the event of a casualty while a landlord performs the obligatory repairs.

#4 Damage to Important Parts of the Property

Even if your specific office space is not damaged, it is important to talk about what will happen in the event that other key areas of the property are damaged—for instance, the parking lot, or the space of an anchor tenant who might leave and decrease the value of the location.

#5 Waiving of Tenant Fault

Make sure that in your lease you negotiate for a mutual release from responsibility for property damages for both parties so you are not in danger of being pursued over subrogation costs. Even if the landlord tries to claim that the damage was partially because of tenant negligence, you should protect yourself from this possibility in all aspects of the lease since you already help pay for the landlord’s property insurance through CAM costs.

While you might never have to use any of these clauses in your lease, it is important to make sure your business’s rights and interests are protected in the event of a casualty to the property.

Is your business looking for affordable office space in Overland Park? Give us a call today at 913-685-4100 to set up a tour of an office space in Overland Park, KS!

3 Questions You Should Ask About Your Kansas City Office Space Lease

Renting commercial real estate can be a more complicated process than one might think. With markets varying based on location, outdated terminology, and very little regulation, the process can be confusing for a business looking for a good deal. Here are a few big questions you should be asking throughout the leasing process in order to come out with the best deal possible, as suggested in the article “3 Things You May Not Know About Commercial Real Estate”:

Are there any hidden fees?

Leases can turn out to be riddled with hidden costs if you are not a careful reader and negotiator. One major source of unexpected expenses is Common Area Maintenance costs (CAM). While this is a typical expense you should expect when signing a lease, be aware that the landlord can put a variety of different expenses into this category. For example, landlords have to pay property management or asset management fees, but sometimes they can pass this cost onto the tenant through CAM charges.

Know that a lot of costs are unavoidable, but it is important to know the exacta amount you are paying, what that money is going to, and whether you are being asked to pay a fair percentage of those costs. Don’t be afraid to clarify and negotiate these kinds of terms.

What is my real square footage?

Square footage, which describes the size and boundaries of an office space, seems like it would be a standard measurement, but there are actually varying ways that square footage is calculated; different markets have different ways of measuring property in terms of what they include and exclude in their measurement of a space. For example, some measurements might include things like wall cavities or pillars – spaces that you really cannot use.

To avoid paying significantly more rent for space that is unusable, make sure you first clarify with your landlord what exactly the listed square footage includes, and then make sure that you visit the space yourself to check and see that there are not a multitude of awkward, unusable areas that you are being charged for. You might even consider bringing in someone to measure the space for you to make sure everything matches up.

Can I get any financial help to improve a space?

If you know that you need to make some changes or improvements to a space, a big question is where you are going to get the money to do that. You might be able to negotiate for a tenant improvement (TI) package from your landlord, which is money that the landlord puts toward the improvement of the space. This privilege is usually reserved for tents signing a long-term lease, and landlords might really emphasize this benefit to compete with other spaces you are looking at.

However, it is important to closely examine where exactly this improvement money is coming from. Know that most likely the landlord is actually building these improvement costs into your rent in the long run – sometimes even with an interest rate as high as 10%. This can be costly in the long run, so make sure you know exactly what you will end up paying. This improvement package can be great if you do not have the cash initially improve the space, but make sure you don’t wind up ultimately paying more than you budgeted for.

Getting a good deal on a commercial real estate space is possible, but it requires some research and careful negotiation. Make sure you are prepared to get the best deal possible for your business!

If your business is looking at commercial MLS listings in Kansas City, give us a call at 913-685-4100 to find out more about our affordable office space in Kansas City!

Co-Working vs. Traditional Office Space in Overland Park, KS

A lot of businesses are experimenting with new office space models, ranging from remote offices, to hot desking, to co-working spaces. For businesses who want to keep their offices fully occupied, here are two different options to try, each with their pros and cons: the co-working space versus the traditional office model. Below are some details on each, as described in the article “The 21st Century Debate: Remote vs. Office vs. Co-Working”:

Co-Working Space

A co-working space is a great option for businesses who have extra space that they want to do something with. Provided that their lease allows them to sublet, they can rent out this space to very small businesses or freelancers who just need a desk. These tenants could belong to a variety of different businesses and not even be in the same industry.

The benefit of this option is that it is a good financial arrangement for all parties – freelancers or small businesses can more easily afford this kind of space, and you can reduce your rent costs by making sure that no spaces in your office sit empty. The mixture of potentially different industries can also lead to interesting relationships and insight that might not be possible when everyone in the office is in the same field.

However, the downside of co-working is the possibility of a dysfunctional environment if employees and renters do not get along, which can negatively affect productivity and creativity for your business.

Traditional Office Space

While companies like Facebook and Google are very visible examples of non-traditional office spaces, the tradition space is still the dominant mode in the U.S. In this setup, collaboration between employees is easy, and the arrangement is ideal for employee-client interactions. Management can also more easily monitor employee performance and encourage teamwork.

The drawback of this option, besides the usual distractions that can come from colleagues working in close proximity to each other, is the expense, since your business has to shoulder the cost of the entire office space alone.

What works for your business depends on your financial situation and the work habits of your employees. If what you are doing right now is not working as well as you would like, don’t be afraid to change things up and try a new model!

If your business is interested in Overland Park office space for lease, give a commercial real estate broker in Overland Park a call today at 913-685-4100 to learn more about our available space!

5 Steps to Take Before Signing Your Small Office Lease in Kansas City

Before you sign your office space lease, make sure you have taken all of the necessary steps to get the most favorable lease possible. Here are a few things to check off your list before signing the dotted line, as suggested in the article “What Do I Need to Know Before Signing a Commercial Real Estate Lease”:

#1 Know the Jargon

Before tackling lease negotiations, it is important to study up on the terminology you will encounter. For example, you will most likely see the term CAM – Common Area Maintenance, a cost shared among all tenants.

#2 Read the Lease Carefully

Your brain will want to skim a tedious document like this, but take the time to read it closely to make sure everything is in order. Don’t be afraid to ask clarifying questions if there are parts that seem confusing. Carefully note all of your obligations, as well as the landlord’s, as you read.

#3 Prepare Your Business

Make sure that your business has its financial and legal ducks in a row before entering the lease. Don’t forget to file your Articles of Organization or Incorporation, and be ready to provide a guaranty – you will most likely not get out of doing this, but remember that guaranties are negotiable.

#4 Check for Assignability

Check to see that you can assign the lease in the event that you need to sell your business. Location might be a big part of the appeal for a buyer, so if a landlord can terminate your lease over a change of ownership, this decreases the value of your business in the eyes of a potential new owner. Try to include an assignability provision, if only just in the case of the sale of your business, though remember that the landlord will still want to vet the new owner for their financial responsibility.

#5 Negotiate

This is so important – the lease you were given is not set in stone! As you read the lease make a list of provisions that you still want included or ones that you do not like and talk these over with the landlord – you never know what they might be willing to concede.

Once you’ve found a space and settled on the rent, don’t forget to take these few extra steps before signing the lease!

For information on office lease rates in Kansas City, give Kathy Woodward at DDI Commercial a call at 913-685-4100!

5 Tips for a More Efficient Planning Process of your Kansas City Office Space

Productivity and collaboration are key components to any thriving business, and these can be promoted by designing a space that employees feel comfortable in. Making sure that employees are happy with changes in office space will help make the transition from one space to another a lot easier! Even though the space and design layouts of the Facebook and Google offices are impressive, they aren’t exactly effective for everyone’s workspace. So here are a five tips to consider when redesigning your own offices, as suggested in the article “9 Efficiency Tips for Space Planning Your Office”:

Make it your own. Personalization is an key factor for feeling proud of your space. People who design and rework their own work environments feel a sense of ownership of their space. This can increase a sense of attachment and productivity toward work that is developed and executed there.

Consider the amount of space. When designing the amount of space you need for your office you may want to consider how much space is actually essential versus how much space you want. One thing to consider is that storing and filing important materials are very important parts of the workflow, but this needs to be done without sacrificing the natural feel of the office space and the workers’ requirements.

Design then grow. It is important for the office layout that you are considering to be designed with growth in mind. When coming up with each of the different departments of your office space; remember to think of the unique type of work that will be getting done there, as well as what the space will be in the future of the company.

Think technology, be aware of budget. Technology is a great way to create a unique environment for your office. Talk to IT consultants and management about what is needed to get a deeper understanding of what could be used in the future for workers. This may help create a very distinctive atmosphere for your employees. However, be aware of the budget and time constraints – it can be easy to get lost in the conceptual design of an office.

Look for a variety of opinions. The design of the new office space should incorporate other people’s ideas as well. Remembering to ask management and IT is important, but also consider asking employees about potential design ideas. Get everyone involved in the redesign and this will help promote a positive attitude toward the change.

Redesign and change can require a lot of work, but incorporating these tips could change a dispirited space into something everyone is happy with!

Are you looking for commercial realty in Kansas City? Give one of our commercial real estate brokers in Overland Park a call at 913-685-4100!

Checklist for Assessing an Office Space in Kansas City

Once you have found a few office spaces to seriously consider, there are a few things you should look into before going any further in the process. Here are some suggested items to put on your checklist, as outlined in the article “HOW TO: Choose the Right Office Space”:

Space and layout. Take the time to lay out a mock version of how you would want your office space to work. Does your design work in this particular space? This exercise serves the dual purpose helping you evaluate whether this will be enough space and visualize how you will actually operate in a space – how you will divide it, how it might need to be modified, and how it fits the style of your business.
Room for expansion. If you anticipate growth during the term of your lease, it is important to talk to the landlord about what your expansion options are in the event that you outgrow your original space.
Decorations and modifications. Find out in advance how much you can do with the space, both in terms of bigger build-outs and simple decor choices, such as painting the space or putting things on the walls.
Sound. It seems oddly specific, but be sure to check out the acoustics of a space, both whether it is too echoey inside and what kind of outside noise seeps in.

Make sure to make and use a checklist to really evaluate a space before you sign a lease!

If your business wants to calculate square footage needs, give a commercial real estate broker in Kansas City a call at 913-685-4100 for some help!

8 Insights For Startups in a New Overland Park Office Space

Managing and developing a startup company can be an all consuming task, one that demands drive, vision, patience, and a willingness to learn from mistakes. Here are some insights from successful business CEOs and founders who have been there and overcome the challenges associated with starting a business, as described in the article “Wisdom for Startup Growth, From 5 People Who’ve Been There”:

#1 Smart hiring

It can be hard for a small business to devote a lot of time to the recruiting and hiring process, but this pays off in the long run. Once you have a stable base of employees, think about how you can actively recruit new college graduates with the skills you need, and think about how you can tailor the application and interview processes to find the candidates best suited to your business. Multiple CEOs have cited that an early mistake they made was not devoting enough time to the interview process to screen both for skills and for whether or not a candidate is a fit in the company culture. One CEO recommended data driven interviews, which means that candidates are encouraged to bring evidence to back up what they say in an interview.

#2 Attract the right people

Once you can draw from a large pool of strong job candidates, start making sure that you are hiring people that you know will perform in the specific areas you need. It is important that these people are not only highly motivated, but also have the special set of skills to further the company, which means that it is important for you as an owner to keep your company’s interests at heart and communicate clearly to people what you need from them. Finally, don’t be afraid to change what you ask of them as you learn more about their individual skills.

#3 Teamwork and collaboration

Once you have a stellar team assembled, it is time to empower them to truly collaborate with each other. This can be a challenge for growing companies in particular, who want to maintain that small business culture even as they expand. Develop company values and your culture to demonstrate to the whole office what is really important to the business, and give employees feedback during regular review procedures. Another practical way of encouraging teamwork is designing your office to allow collaboration, as well as making sure that you yourself are accessible to your staff as much as possible.

#4 Customers and branding

Customer service is key for new companies trying to get their names out there. Focus on developing your brand and allowing your customers to help determine the direction it takes. Conduct regular surveys; ask customers what they like best about your business and run with that, developing your image in tandem with what your customers know and like.

#5 Don’t be afraid of change

Just because your company starts as strictly online or only making a certain product does not mean that you have to stay in that box. If good opportunities come along to get into other products or services or partner with other businesses, don’t be afraid to consider these opportunities, even if it means a shift from your original vision.

#6 Management and communication

Errors in management involving insular views and a lack of collaboration can have insidious long term consequences for a new business, causing problems that can be hard to find and fix. Communication across disciplines and departments in a business can be difficult and frustrating at times, but it is important for management to always approach these situations with an attitude of understanding and a desire to understand the viewpoints of others in the business. This will help create an overall culture of teamwork throughout the entire company.

#7 Learn from mistakes

A mistake is not the end of the world, but it is crucial to identify problems quickly, do everything you can to solve them, and then make sure you never repeat the same mistakes twice. But don’t let yourself dwell too much on the errors—every business, every entrepreneur deals with problems at some point, but how you bounce back from them is what is most important.

#8 Keep everyone connected

As your business grows, you will still want to keep everyone on the same page and moving in the same direction. Some practical ways to do this are to make sure people stay up to date and connected using technology, such as live streaming meetings to different locations, sharing videos, and allowing people to comment on things in a communal virtual space.

Starting a business means keeping a lot of balls in the air at once, but there is so much wisdom to be gained from those who have already succeeded on this path. Make it a priority to think about these overall goals and strategies, instead of getting lost in the day to day of conducting business.

If your business is interested in office rental space in Overland Park, give us a call at 913-685-4100 to learn more about our affordable office space in Overland Park!