5 Things to Consider when Looking to Lease a New Office Space in Bucharest

5 Things to Consider when Looking to Lease a New Office Space in Bucharest 500 308 BUCHAREST REAL ESTATE CLUB

Looking to Lease a New Office Space in Bucharest?
5 Things to Consider when Dealing with Landlords and Real Estate Brokers

Either you are a local or multinational office space occupier, your business needs to have a perfect match when it comes to occupying an office space, especially under today`s costs optimization constraints and qualified workforce shortage.

Before office search and negotiation process become a multiple-resource sponge, here are a few main factors to consider for navigating in the Bucharest office market:

Assign a Senior Project Manager/ Relocation Committee from inside your company

Consider Office Relocation as a strategic project, as it actually is. It impacts your yearly cashflow, employees satisfaction and retention rate, reputation in the market, positioning towards the company`s stakeholders and potentially production/ supply processes. For leading all the phases of office search and negotiation, choose the person/ team in charge based on these essential characteristics: ethics and integrity, negotiation skills, attention to details, strategic thinking, financial understanding, leadership and accountability and, nevertheless, soft skills. Simply think at the amount of your yearly office rent invoice – would you let a process impacting your yearly cashflow in some unexperienced hands?

Do your Homework. Go with a Pro

If your company policies allow you to carry on an agency pitching process, write down a comprehensive brief (with multiple viewpoints from all the internal company stakeholders – i.e. Purchasing Department, Financial, Administrative, HR, Strategy, Public Relations, etc.) and organize a Real Estate pitch for choosing the Real Estate brokerage company that best matches the attributes that are relevant for you (i.e. market know-how, advisory approach, client servicing).  CBRE, Colliers, Cushman & Wakefield Echinox, Knight Frank, JLL or BNP Paribas Real Estate are among the top brokers on Romanian market, but nevertheless a smaller-sized, local agency can also do a good chemistry with you, depending on your company`s needs.

Gross Lease or Net Lease?

Dig the financials and hidden costs, you don`t only pay for what you see. A good advisor or building landlord will be very transparent in explaining all costs triggered by office space leasing (i.e.  maintenance costs, utilities, rent for un-used areas, etc.) – but nevertheless, consider that everybody wants to upsell – so you should better do your financial homework or at least ask the right questions.  Most leases are gross leases or triple net leases. A gross lease means that the tenant pays the landlord one sum and the landlord is responsible for payment of real estate taxes, insurance, and maintenance expenses. In a triple net lease, the tenant pays a set rental amount to the landlord, but also pays a share of the landlord’s real estate taxes, insurance, maintenance expenses, and building utilities.

Independent / Local Landlord or Corporate Building Owner?

It depends on your strategy. Independent, non – institutional developers in Romania tend to be more flexible in various aspects of the negotiation, which turned out to be convenient in many cases (a typical example: when a tenant wants to break the contract exit clauses and leave the building earlier). On the other hand, typical corporate building landlords are well experienced in assets management, corporate clients servicing, hold high standard buildings and facilities, but may come in package with low flexibility or very restrictive contract clauses.

Look well in the Track. Challenge your Advisors and Building Owners

Do they have a portfolio of happy clients/ tenants? Do you know any of the tenants they present in their portfolio, so you can ask for references from the source? Is the building almost fully occupied or is there a large vacancy rate – and why? Why did the last tenant leave the building? Try to gather as many as possible background information and references – a well possible informed decision can spare valuable €€€ and un-necessary future efforts.

Need more insights on the Bucharest Real Estate market? Get in touch with us at bucharest@brec.ro.