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By Eilene Zimmerman · Photos by Greg Lambert

Average, full-time employees spend a little more than a third of their waking hours at work. That's 2,080 hours each year spent in an office environment - at a desk, in front of a computer, maybe even looking out a window onto the harbor. Yet it’s rare to find a person who puts as much thought into leasing office space as they would, say, into buying a house.

    "People spend an awful lot of time in their offices," says Tim Cowden, an office leasing specialist at Grubb & Ellis. "I think it’s important to let emotions play a bit in your choice of office space. If you've got two or three sites that are roughly the same in price and functionality, but you just enjoy being in one more than the others, use that feeling as a criterion."

    How you feel about a space is certainly important, but leasing specialists say other, more tangible factors should be considered as well. All agree that broker representation is essential. Even if a tenant plans to remain in an existing space, John Donovan at John Burnham & Co. advises they retain a broker. "By virtue of the fact there is a broker, the landlord will become more aggressive in trying to keep that tenant. And I think it gives the tenant comfort that they have made an informed decision because they have considered other alternatives," says Donovan, senior vice president for corporate services.

    When choosing a broker, qualities such as honesty, integrity and professionalism immediately come to mind. Donovan adds solid negotiating ability and market knowledge to that list as well. "It’s hard to quantify the abilities of a particular broker, but you can use their experience, referrals from other clients, deals they've done," he says.

    Donovan also says that a broker should have an understanding of the tenants' business. "I think brokers often become way too transaction-focused and don’t really see the long-term, more global needs of the tenant." The problem, he says, is the way brokers earn their living. "It’s all based on commission, after the deal is done. So the broker has a tendency to be very focused on consummating the transaction, rather than fostering a long-term relationship with the tenant."

    David Russell, vice president of leasing and marketing for Compass Management and Leasing, says a broker is necessary because the real estate market is an inefficient one. "It’s not like the stock market, for instance, where you call a broker and get a quote. Real estate is really a function of the ability of your broker to understand what’s available, what other transactions happened in that building, at what rate and on what terms. Each deal is different," he explains. When a broker has good information about the market and the building in question, opportunity is created, says Russell.

    Should a tenant decide to go it alone anyway, they can always consult the online listings at Americrest, an Internet-based service which lists properties for lease and sale in San Diego County (www.sandiego.americrest.com).

    Grubb-Ellis' Cowden says after dealing with the broker question, a tenant's next step to consider is how much space is needed, how they want that space configured and any economic limitations. "The tenant has to evaluate where their industry is going, and where their company is headed within that industry. Will they be contracting or expanding in the future?" he asks. "There's nothing worse than saddling yourself up with a 10-year lease and then finding out two years down the road you are doubling in size." Cowden's advice to tenants is to visualize where they will be in two, five and eight years down the line and then try to plan.

    But figuring space requirements is a tricky business. "A tenant needs to look for efficient use of space. Many times we get clients who say they need 3,000 square feet, but they really don’t," says Howard Greenberg, president of Trilogy Real Estate Management. Instead of wasting money on space that isn’t needed, he suggests hiring a professional space planner to help in the calculations.

    Tenants also should be realistic, says Kenny Jones, managing officer at CB Commercial. "If you are a 20,000 square-foot law firm you can do a bit of planning. But if you’re a 2,000-square-foot insurance company, you are more limited. And you have to work within your economic fix," he says. That means if a tenant wants to be located in the UTC area, but can only afford $1.25 per square foot, they will have to reconsider either the location or what they can pay.

    That brings up another point: location. For many prospective tenants it is the key to their decision, followed by things like adequate parking, security, their employees' commuting distance, and surrounding amenities like restaurants and retail shops.

    "Water views, parking price and space efficiency are very important in Downtown San Diego," says Matt Spathas, a partner at Sentre Partners. Spathas says many clients also are looking for Internet-ready spaces. "In our two Downtown buildings we have services from five major Internet access providers immediately available," he says. A tenant can move into one of Sentre's buildings and have his choice of online service providers, because the building is wired, willing and able.

    Something else to consider, says Steve Williams, also a partner at Sentre, is finding a landlord with whom the tenant can work. "There are sub-issues that come up everyday when leasing," he cautions. "Having a landlord you can grow with is a terrific advantage," he says.

    And that landlord, of course, is the other half of the leasing equation. Trilogy's Greenberg says it’s not always necessary for the landlord to use a leasing broker. "It depends on the size and type of space you are trying to rent. I think you are finding leasing brokers in today’s market turning away business. You can spend the same amount of time on a 1,000-foot lease as you can on a 5,000-foot lease, so why take the smaller one?" he asks.

    Nearly everyone agrees if a landlord decides to use a broker, that broker must be able to play nicely. "A broker must have good relationships with other brokers. Because his main job is to solicit other brokers," says George Champion, senior vice president at Irving Hughes Group. Champion was a landlord broker himself for four years. "There are brokers in this town that have alienated other brokers and it becomes tough for them to see all the deals in the marketplace. It becomes tough for them to get the deals, even when they do see them," he says.

    Anders Wagstaff, director of Walsh & Chacon agrees. He says tenants and landlords often are represented by different brokers and those brokers have a kind of fraternity. "If you are not well-liked, you will probably end up missing certain tenants in the marketplace. So as a landlord, you want a broker that others like to deal with."

    In selecting a broker, Trilogy's Greenberg says above all, you need someone with experience in negotiating leases. "Request a resume, you can certainly do that. Ask about transactions they have closed, call their other clients and see the satisfaction rates," he says.

    It may be best to put your property in the hands of a company that specializes in the market area where the building is located. Or perhaps hire someone to work full-time at leasing your property, rather than using an outside broker, suggests Champion. "If you have a Class A property and lots of space to lease, it might be better to have one person exclusively dedicated to the project, as opposed to someone who might be selling or leasing other buildings, doing everything other than focusing on your project."

    But most important, says Compass Management's Russell, is hiring a broker who helps make the entire process easier. "Lease transactions can be very difficult," he says. "The easier the broker can make that for the landlord, the tenant and their rep, the better."

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