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THE BASICS OF SELECTING A NEW LOCATION

Have you got the bug for a new location? If the answer is "yes," then a bit of knowledge will sure come in handy. Whether you are looking to move or open up an additional office, and lease, buy, or even build, the process begins with researching potential spaces

By Barbara L. Wright, C.I.D., and Erinn Morgan

Have your office space needs expanded above and beyond the current square footage? Or, have you grown enough to warrant a second location? The only way to know if a move is feasible is to determine how much that new office could cost. The path to realizing this information includes a vast variety of considerations, all based on whether you decide to lease, buy, or build.

BEFORE YOU LEASE

Buying and remodeling an existing building or building from the ground up requires a much larger investment of money and time than leasing a space. Leasing is a bit simpler, but even if you believe you've found the right space, there are many factors to consider.

• Parking: You can actually be denied clearance to operate if your desired location lacks sufficient parking. Don't rely on your landlord's assurances that it's no problem. Call you local building department with the address of the property and ask:

1. Is the location zoned properly for your business use?
2. What are the parking requirements for your space?

• Zoning: If you are changing the use of a property from one zoning category to another (such as from R-1 Residential to C-1 Commercial), the building department may require an application for a variance or conditional-use permit, which will add time and expense to the design phase. Make a call to the building department about possible obstacles.

• The Americans with Disabilities Act (ADA): These federal laws require that any commercial building or remodeling project must provide access to public spaces for the disabled. Check ADA guidelines to determine if your office meets the minimum requirements. If you don't, costly improvements may be required before getting a building permit.

• Neighboring Businesses: Is one of your neighbors likely to produce noise or odors that would make patients uncomfortable? Take a look around the space you are considering. Also, try to get a clause in your lease ensuring that the spaces adjacent to yours won't be rented in the future to a business that may cause excessive noise or unpleasant odors.

• Demising Wall: The wall that separates your space from adjoining tenants should be built with tall studs and drywall that go up to the roof structure above. Check the quality by lifting up one of the ceiling panels right next to the wall and shining a flashlight into the space above.

• Signs: Most cities and municipalities have strict sign ordinances. Obtain copies of all sign regulations from the building department and your landlord and review them to ensure compliance.

• Landscaping: Check out the landscaping in front of your space. Will trees or bushes obscure your sign or the visibility into your space?

• Commencement Date: Many landlords allow you one to two months for design and construction before your first rent payment is due, but this is often not enough time. The ideal arrangement is for your rent to start on the day you actually move in.

• Turnover Date: If you lease a space in a shopping center that is still under construction, find out the projected turnover date—that is, when the construction of the building shell will be completed. If that date is several months away, use that time to get your plans designed and bid out.

• Hours of Operation: Does the landlord require that you be open certain hours and days? Make sure that your desired business hours are acceptable to the landlord.

• Tenant Design Package: This useful tool includes drawings of the entire shopping center and the square footage and dimensions of your space. It often includes a guide booklet which spells out the criteria for the sign and interior design.

• Common Area Maintenance: This fee is an additional cost to your price-per-square-foot rent. Ascertain how much it has increased over the past two or three years.

• Building Allowances: Some landlords will help defray the cost of your improvements by as much as $10 to $20 per square foot as an incentive to get you into their building. This adds up as it can easily cost $100 per square foot or more to build out an optometric office. "You can probably get some good concessions right now," says David Bodamer, editor-in-chief of Retail Traffic magazine.

• Construction Limitations: Many landlords won't allow your contractor to do any work involving penetration of the roof, such as venting an exhaust fan. Instead, they require that you use their contractor.

• Other Tips: Leasing agents can make all kinds of verbal agreements. But whatever is promised to you must be in writing on your final lease agreement.

"Probably the biggest mistake that folks make with leasing facilities is they attempt to be leasing experts themselves," says Al Cleinman, president of Cleinman Performance Partners in Oneonta, N.Y. Consider consulting a tenantbuyer rep and a lawyer who knows business and commercial real estate law.

Finally, negotiate the maximum build-out allowance for the improvements you plan to make and determine what you'll be permitted to move at the end of the lease.

BEFORE YOU BUY

Is your goal to own your own building? Plan A might be to purchase the property, close escrow in three months, start building three months after that, and move in six months later—a total of 12 months.

Have Plan B in your pocket in case that timetable gets pushed off schedule. Never commit yourself to moving out of your present location when you haven't even broken ground on your new building yet.

• Buying an Existing Building: You'll need to think about many of the same factors previously discussed as leasing considerations.

Also, hire a good contractor to survey the building, and determine whether the major systems like heating and air conditioning, electrical, and plumbing are in good working order. Check with the owner to see if they have a set of plans for the building. Also, consider what the remodel would cost to make it suitable for your business.

• The Purchase Contract: Since every real estate deal is different, you will need to get advice from a lawyer on how to best protect your interests in the contract. Typically, however, it should address at least the following:

1. An exact description of the property you are buying, including the land surrounding the building.
2. The purchase price and if it is all due at closing or in installments.
3. A list of equipment or personal property included in your purchase.
4. Any contingencies that must be met before you are obligated to complete the purchase. For example, you can make the deal contingent on your ability to get a mortgage loan.
5. How property taxes and utility bills will be pro-rated between you and the seller.
6. The type of title evidence or title insurance the seller must provide.
7. The date for closing and delivery of possession.
8. The legal recourse there is for defaults.

A new construction project by designer Barbara Wright

BEFORE YOU BUILD

Building a new structure is the most costly way to house your practice as far as the initial outlay goes. However, it can also be the best for you in the long run if land values are reasonable in your area.

Since U.S. office property sales fell in late 2007 by the largest amount since the September 11 terror attacks, 2008 may be a good year to invest in some land. But it might be worth a wait to see how low the market goes.

Finally, when building your new office, consider your future needs for growth before you settle on square footage. "A lot of ECPs under-build and find themselves in the new facility and almost immediately wish they had extra space," says Cleinman, whose business has a modeling tool that allows clients to look at their facilities over a 10-year period to determine growth potential and size needs. EB

This article is based on Barbara Wright's new book, Optometric Office Design Process and Pitfalls, available online at www.ecpdesignbook.com.