Charleston Regional Business Journal - November 29, 2021

Page 23

Viewpoint

VIEWS, PERSPECTIVES AND READERS’ LETTERS

Securing the right space for your business M

ost companies start from a basic idea or premise of creating something that the market needs or wants. Often, the result is the primary focus while the processes and requirements to meet that result are secondary. For example, transitioning from working from your home office or RANDY garage to leasing CUTTS commercial space can be a daunting prospect, and is often the largest new expense for a company. Proactively preparing for this transition is a key to avoiding costly mistakes. When the need for this transition is reached, organizations or individuals are often not fully prepared for what they should be looking for in a commercial space. In my experience, each business is as unique as the individuals involved and there are just as many variations for meeting their requirements and goals. In this article, I will attempt to help you think through the process and provide you with more questions to ask yourself or a real-estate professional than answers. There is no “one size fits all” reply to what each business needs or desires for a workplace environment.

The importance of the lease

The lease is a binding contract between the parties that defines how you are permitted to use the space. The lease also addresses what is included in your rent or what is not. The lease outlines possible additional expenses to be considered, such as utilities, parking, hours of operation or availability to the facility. For example, there may be premiums if your business requires you to operate outside of the facility’s normal hours as defined in the lease.

How do I make sure I am leasing the amount of space that I need?

The answer may be tied into how long you desire to be in the space. If you are signing a longer-term lease — usually 3-5 years or more — you will need to consider growth into the equation based on your business plan. Have the conversation with the facility management to determine their flexibility or interest of phased leasing. One tool that can be incorporated into the lease would be a first right-of-refusal clause. This allows

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“There is no ‘one size fits all’ reply to what each business needs or desires for a workplace environment.” you to be first in line should another party make an offer on any available space within the facility. This clause provides you the right to meet the proposed offer and secure the space for yourself, or if you are not ready for expanding your own operation, defer to the new candidate.

What if I outgrow the space before my lease term is up?

This will be defined in your lease terms. If you have executed a longer-term lease and your space requirements become more than is available in the current facility, you can be bound to the terms agreed to without remedy. You may be able to provide yourself with additional flexibility by having options written into the original lease which allow for early termination at certain intervals. An

example would be where you can execute a five-year lease with an option to renew or not at year three. This allows you to secure the space for the full five-year term or use the option to terminate after the third year. You may also to be able to provide options for renewal or extending your lease at the end of the original lease term, such as a five-year lease, with two one-year renewal options.

What if I have specific requirements for my workspace?

Again, each business is unique, and requirements can vary dramatically. The array is as large as the imagination, whether drop-in workstations, an office with a desk, wet labs with the ability to do scientific research or secured areas for classified work. Although the current availability of wet lab space is somewhat of an issue, all these options already exist within the real-estate environment of our state. The key is identifying the space that meets all your current and anticipated needs within your desired geographic region and at the most affordable price. Selecting the correct real-estate agent to locate such space is often the key to success in identifying the space that meets all these criteria. Given the importance of that selection decision, it is vital to seek suggestions from colleagues and perform

careful due diligence before engaging a real estate agent.

The right facilities are vital for economic growth

South Carolina Research Authority has developed some of the most technologically advanced facilities in the state and is attracting businesses from other regions of the United States as well as countries from around the world to relocate their operations here. Our state has done an exemplary job of offering worldclass space. However, we must continually provide the forward-looking facilities that allow our companies to optimize and expand their ability to offer a variety of products or services for regional, national and international markets which are developed or produced in a safe, secure and productive environment. CRBJ

Randy Cutts is the facilities director for the South Carolina Research Authority.

We want to hear from you Write: Andy Owens, Executive Editor Charleston Regional Business Journal 3265 North Carolina Avenue, Suite 101 North Charleston, SC 29405 Email: aowens@scbiznews.com


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