• Business planning and strategy

Commercial lease trends

Guest Blogger | May 7, 2013

Many things are trending in the retail and commercial office lease market but here are a couple of significant considerations of importance.

The days of big executive offices with lots of windows and space to conduct in-office meetings are gone. Smaller offices are replacing them, utilizing more boardroom space and smaller meeting rooms (to meet with clients and staff), and this trend has been happening over the past number of years. The reason being, that it is a more effective use of square footage, enabling owners to increase the revenue per square foot generated, and as a direct result, profitability.

From a completely different viewpoint, the gift that keeps on giving in branding is signage. Any business owner who is negotiating a lease and isn’t trying to upgrade the size, position and visibility of their signage is likely missing an opportunity. Depending on factors such as drive-by impressions, the ability of any small business to garner brand awareness in larger metropolitan areas is a very expensive proposition, to say the least. Signage is a one-time investment that delivers brand impressions and creates brand awareness – delivering an ROI that is unmatched with any other media purchase.

When negotiating a new lease, the obvious things such as price per square foot or amenities are easily shopped and compared. What businesses are doing to leverage their investments in real estate to be more visible, competitive, or profitable, are important considerations in today’s tightening economy.

Ellis Orlan, BA, CPA (IL), CGMA, SF Partnership LLP, Toronto, ON, CYBF Mentor, eorlan@sfgroup.ca