Tips for Finding Boston Office Space for Your Startup
As you probably already know, Boston is currently experiencing some of the lowest office vacancy rates in history. Huge, established companies don't tend to be too affected by this phenomenon, as they have the resources that are needed to afford ever-increasing rents and the flexibility that's needed to move elsewhere if necessary. Things are different for startups, however. Around the city, they struggle to acquire affordable office space that suits their unique needs. Sound familiar? If so, Boston City Properties is here to help.
We have developed a list of 15 crucial tips for finding great office space for your startup. These tips apply virtually anywhere, but they are uniquely applicable to the Boston area and its current market conditions. By keeping these tips in mind, your search for suitable space for your startup should go off without a hitch. That's especially true if you continue to rely on Boston City Properties.
Without further ado, here are 15 tips for finding the right office space for your startup.
1. Have Clearly Defined Goals
Before looking at a single listing, sit down and hash out the goals that you have in mind for your search. Consider your business goals and real estate goals to ensure that you arrive at the right decision.
Going into your search, you should have a clear idea about things like how much space that you will need and where it should ideally be located. What kinds of transportation requirements do you have? Will on-site parking be necessary? What kinds of technological needs does your company have? What type of space will help you conduct business the most efficiently? Most importantly of all, have a clear budget in mind. Later in this list, you will find advice for arriving at the right budget for your new office.
2. Don't Get Locked In
Unfortunately, the vast majority of landlords in commercial real estate prefer leases that are anywhere from five to seven years long. Long-term leases are not ideal for startups for a number of reasons. For one thing, there is no telling how quickly your company will grow. Right now, that tiny office may suit your tiny team. What happens if your business booms, you take on more employees but don't have enough space for them? If you are locked into a long-term lease, you will be in a really bad spot.
One great way to get around this issue is by being open to subleasing. You should also explore alternative options like sharing space. If you are willing and able to do a direct lease, you may be able to find a landlord who will agree to a shorter term. However, you shouldn't count on it.
3. Figure Out the Right Layout
Consider the nature of your business. If your company is in the creative or tech fields, odds are that employees tend to collaborate a lot to come up with new ideas and the like. In that case, an office with a wide, open layout would probably be best. The beauty of this type of layout is that it is also very flexible. In fact, if you aren't sure which "type" of space will work for you, stick with open layouts just to be safe.
On the other hand, if your business is more akin to that of a law firm or financial institution, you will probably prefer an office that affords employees more privacy. This may include separate offices for leadership and a conference room. If you need cubicles, make sure to keep that in mind and to specifically seek that during your search.
4. Determine Which Amenities You Need and Which You Want
It's easy to get ahead of yourself when looking for space for your startup. As you explore office space around Boston, you'll quickly discover that many office buildings and developments offer huge arrays of high-end amenities. It's easy to get dazzled by those amenities and to end up in a building that far exceeds your budget.
Prior to searching in earnest, write a list of "must-have" features and "nice-to-have" features. You will be choosing from a wide range of amenities, so consider whether or not you really need something or if it would just be a perk. Amenities to consider may include security services, break rooms, kitchens, high-speed internet access, the quality of the bathrooms and more. It may be nice to have certain amenities, but it is nicer to be in a place that you can actually afford.
5. Establish a Budget
You will find a ton of advice online about figuring out the right budget for your office. All too often, startups are advised to base their decision on price per person. However, this model doesn't work well under these circumstances, as it leaves out extra costs that can cause serious problems down the line.
Therefore, try to come up with a monthly price that includes everything that you will have to pay to occupy that space. This includes hidden fees for things like furniture and utilities. As early as possible, obtain a list of additional fees that you will be responsible for, and include them in your budget. Ideally, your monthly budget should roll all of these costs into one. Be sure to give yourself a bit of a cushion too, as there is no telling how things will go.
6. Start Early
Regardless of how much--or how little--space that you need, it is crucial to begin your search as early as possible. Conventional wisdom dictates that if you are looking for 10,000 square feet or less, you should start searching about four to six months before you need to move in. If you need more space than that, start at least six to 12 months before your scheduled move-in date.
Given how competitive Boston's commercial real estate market is right now, though, you might want to give yourself even more time than that. Many factors will affect how early you should start, including how long it will take to draft lease documentation; how long it will take to acquire permits; the amount of time that it will take to complete negotiations; and more. With the right help, you may be able to cut your search time down a bit, but this is one thing that you don't want to rush.
7. Put Your Company in Best Financial Light Possible
Get your ducks in a row in terms of finances before starting your search for Boston office space for your startup. Remember, you will be under a microscope as a startup, since most landlords prefer tenants with more of a track record.
Start by compiling some positive financial references. You need to be able to show that you make good on your financial obligations. Get your tax returns and bank statements in order because landlords will want to look at them. You should also be prepared to provide a pretty large security deposit and, in some cases, a personal guaranty. Be careful with the latter, though, as it can cause major problems for your personal finances if things don't go well. Finally, be prepared to either pay a decent amount of rent up front or to provide a letter of credit from your bank.
8. Consider All of the Options
Right now, you may have your heart set on obtaining a direct lease. As mentioned several times, however, this is problematic in that you usually must commit to a term of five to seven years minimum. Even if you are certain about the type of situation you want, consider all of the options. These may include looking into shared work spaces, co-working arrangements or subleases.
Proceed with caution with subleases. While they often come with below-market rental rates, they are also very inflexible. Everything is up to the actual leaseholder, so your fate is somewhat in their hands. If you really like the space and want to stay put, you may find yourself out of luck. Still, for many startups, subleasing is the most practical option.
9. Figure Out How Much Space You Really Need
In the old days, the rule of thumb when it came to figuring out how much space you needed was to allot 200 to 250 square feet per employee. These days, most experts believe that you can get away with just 100 to 150 square feet per employee, depending on the nature of your business.
While figuring out how much space you need, assume that you will fill it max capacity when you are two-thirds to three-fourths of the way through the lease. If contiguous space is available next door, seek termination rights and expansion rights so that you can make use of it someday if need be.
While you may be eager to provide employees with a spacious, modern office environment, the fact is that as a startup, you have to be more conservative. Aim to get the minimum amount of space that you will need by the time your lease is over.
10. Select a General Location
If you're looking for startup office space in Boston, you may already have a neighborhood in mind. However, it shouldn't be entirely up to you. Rather, the ideal location is one that will suit the majority of your team. Therefore, map out where all employees live. Try to find a location that is equally convenient for them all. On the other hand, if most employees live in a particular neighborhood, go ahead and set your sights there.
When seeking a location, also keep public transportation in mind--at least, if many of your employees use it. In Boston, most of them probably do. Make sure that your office is within a reasonable distance of public transportation, or you will inadvertently make employees' lives difficult.
11. Check Up on the Landlord
Before signing a lease for any office space, do some homework about your potential future landlord. The last thing that you need is to end up with a landlord that drags their feet about making repairs or that gives you the runaround about other things. You may be able to glean some info from the internet, but the best thing to do is to visit the building and try to interview current tenants in person.
If you're able to do so, ask them how they like the building. Find out if they have had any issues with maintenance or with the landlord. Ask several tenants, if possible, to get a good array of information. After all, one tenant who has a bad experience may just be an outlier, or they may be far too picky. You will save yourself a lot of potential grief by screening your landlord before you are legally tied to them.
12. Be Ready to Negotiate
All too often, startups assume that the landlords always call the shots when it comes to leasing office space. In reality, absolutely everything is up for negotiation--even the rent. In fact, you should never just take the asking price at face value. Most times, landlords deliberately inflate the asking rate a bit just to see if they can get away with it.
Rather than accepting the asking price, counter-offer with an offer that is 5 to 20 percent lower than what they are asking. There is absolutely no harm in asking, and you may be surprised by how agreeable some landlords are to negotiating more affordable rent. That's especially true when you can deal with the actual owner of the building as opposed to property management staff. Figure out where the buck stops and go to bat for your startup. You might just be able to get away with more affordable rent, better terms, better amenities or other perks.
13. Don't Worry About Trendiness
As a startup, it's easy to feel pressured to be cool and trendy like so many tech firms. Companies like Google can afford to be on the cutting edge of trendiness; startups can't. As nice as it would be to offer employees a really cool work environment, you have to work with what you have. Right now, the priority has to be on growing your business and making it more stable. Trendy office space costs a fortune, and you need to keep costs in line at a time like this.
Even if you can't snag trendy office space, you can still cultivate an environment that fosters innovation. You can make your startup as laid back or straight and narrow as you would like. Later, when you have more resources, you can start looking into cooler digs.
14. Target Space That Has Been Sitting Empty
If you find yourself struggling to locate suitable office space for your startup, you might consider zeroing in on space that has been sitting empty for some time. Not surprisingly, landlords who own such space tend be very anxious about filling it. If you strike at the right time, you may be able to get a lot more space for a lot less.
This type of thing can be tricky for a layperson to manage. However, the right real estate professional can help you put this strategy to work. When looking for real estate experts, make sure that they are willing to help you with special requests like these. In the end, it may be that the simplest way to find affordable office space for your startup is to approach landlords with space that they just can't seem to fill.
15. Get the Right Help
This next point dovetails nicely with the previous one, and it can't be emphasized enough: Line up the right help when looking for startup space in Boston. Really, when looking for any type of real estate in the city, professional assistance is a must. That's truer than ever these days, with the market so fast-paced, competitive and unpredictable.
Don't choose a real estate agent or broker at random. Boston City Properties has connections with skilled commercial real estate experts in all Boston neighborhoods, including many who actually specialize in helping startups and small businesses. When the time comes, then, contact us to be put in touch with someone who will make your search a lot easier.
We offer a variety of great resources through our website that can also make your search easier, so sign up for free access to our searchable real estate listings today.
Find Startup Office Space in Boston with Boston City Properties
If you're looking for a home for your new startup and need affordable office space in Boston, do yourself a favor and connect with Boston City Properties. When you are ready to start your search in earnest, use our database and search tool to pinpoint offices that meet your requirements, including your budgetary and space needs. Later, after narrowing things down, contact us to be connected with a local commercial real estate expert who can take you to look at spaces in person. For more information, call Boston City Properties today.