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Posted by: Kelly R.
I have to say when I was looking for a space in San Francisco to open up my business, it was a bit overwhelming. I felt like little red riding hood battling the big bad wolf. Every space I drove by had a big bad realtors sign on the property. Most of whom never called me back so I could view the spaces listed. I knew exactly what I wanted, it was a matter of "getting in" the space and into the circuit of agents to find the proper location. I was actually very lucky when I did get a hold of an agent because he was great. I know this is not the norm, I have heard some horror stories. Even though my agent was extremely helpful, I did most of the leg work on my own.
I have been through the leasing process twice in San Francisco, I would definitely say the most important thing anyone can do when looking for space to lease in San Francisco is to do your homework. You can't just take the agents information as fact. You need to back up and confirm all information you are receiving about any property for a potential lease. Hit the pavement, ask local merchants what they pay, how long they have been in their location, who owns their building, does their landlord maintain the property, how long has the neighboring space been vacant, why did the other tenants close their business, and anything else you can think of to ask the current tenants surrounding the space you're interested in leasing. The more information you can pool, the better decisions you can make about how to negotiate a lease. Remember you are negotiating with the landlord and the agent.
Most agents will block you from attaining the information that I previously mentioned. This is where Rofo could make all the difference for new entrepreneurs. I spent a significant amount of time doing the legwork myself, since their wasn't an online source for me to cross reference all the information that I was getting from agents. I considered multiple locations both times I was looking for space. Which meant I had multiple agents giving me different second hand information. Rofo can make this process so much more time efficient for entrepreneurs. So they can stay focused on making their business a success and not spending all their time on chasing around brokers and agents to secure a great space with a solid lease.
Last updated: 09.16.2008 10:50 AM
Posted by: Catarina Schwab
I am one of the former co-owners of Flicka Boutique on Fillmore Street in San Francisco. We opened our boutique in 2004 and at the time it was quite difficult to find a space. We decided to use a few different brokers to make sure that we saw all the available properties in our target neighborhoods and once we determined the one neighborhood we were interested in, we worked exclusively with one broker.
In retrospect I would have done more research to make sure he was really the best one in that area. We discovered later that there was another broker who really "owned" the street and it would have been much more beneficial for us to have worked with her from the start. Our broker really had to "pound the pavement" to try and find spaces for us because he didn't have the relationships with the landlords to know the "inside scoop". We ended up finding our space through a friend, but we would have found it sooner had we worked with the more knowledgeable broker.
Once we honed in on a space, we thought it would be relatively easy to secure the lease, but that was not the case. The landlord refused to meet with us, which made it very hard to sell our concept and convince her that we were the right tenants. Luckily we had a pretty detailed presentation that we presented to the landlord's broker and in the end she chose us because she liked our idea. Unfortunately we had to wait almost 3 months for her decision, which was definitely very nerve racking since we didn't have any other options. I would recommend finding more than one space that will work for you because you never know if the landlord will choose you.
I don't remember there being any major issues with the lease, but we did have a great lawyer who helped us read through all the details. We signed a 5 year lease with an option to renew, which I still believe are the right terms. Unfortunately landlords have a lot of power in San Francisco and in general the leases are more favorable to them. You don't have a lot of negotiating power when you really want the space and you are competing against other people.
Once we got into the space, we did not use an architect, but hired a great contractor that did many of the stores on our street. He came in under budget and on time, which is quite a feat! I do recommend that you should speak to at least 3 referrals for anyone you hire and when working with a contractor, you should definitely stay on top of all the expenses on a weekly basis.
One last piece of advice is to try not to pay "key money" or additional cash to buy your way into a lease. Key money isn't always a factor in negotations, but it comes into play during a hot market. There are enough up front expenses to pay: security deposit, remodeling, purchasing inventory etc. that paying key money makes it that much harder to start making money. Lastly, try to stay calm through the whole process because unfortunately you can't always control the outcome. Determine what you can do: 1) hire the best broker 2) put together a compelling presentation and 3) manage your start-up expenses and then wish for a bit of good luck!
Last updated: 09.16.2008 10:49 AM
Posted by: Laura B.
This article is written for Rofo.com by Laura Billings, Principal of Sage Green Development, a green building development and consulting firm. Please contact Laura at laura@sagegreendevelopment.com with any questions.
You’re a small business owner, you are moving your office to a new location or thinking of renovating your existing space, and although you’re interested in greening your business and office, you think “I’m too small to have any clout with my landlord, it’s too expensive, and anyway, as a small business, I don’t have that much impact.”
According to an article in www.greenbiz.com, small businesses account for 99.9% of the 26.8 million businesses in the country, employ half of the private sector and use half of the electricity and natural gas consumed by the commercial and industrial sectors. The choices you make about your office location and fit-out DO matter, and what’s more, it can be very rewarding to move into your new space knowing you did what you could to reduce the environmental footprint of your company.
There are a number of ways to approach a green office construction or renovation project, depending on your priorities and resources available. For example, is healthy indoor air quality a priority, or energy savings? Other important factors include how much control you have over certain decisions in the building; as a 2,000 sqft tenant in a 100,000 sqft building, you may not be able to influence the type of heating or cooling (“HVAC”) system in the building. Nonetheless, there is a long list of items that you can influence that are described below, and many of them have little to no cost impact. In fact, this article is written from the perspective of a small business on a budget in an existing, non-green office building. If you don’t exactly fit this description, read on, there’s still plenty to learn.
How to Green my Small Office Space:
1) First things first. Set your intention to green your office space from the beginning, and communicate this to your landlord, architect and contractor. Although it is still possible to add green elements to a space mid-course, the number of options narrow, and cost increases and time delays can occur once the design or construction are already under way. Your architect will ask you for “additional services” fees when he or she has to revise drawings and your contractor will present you with “Change Order Requests (CORs) to re-do work in the field.
2) Location, Location, Location. One of the greenest choices you can make when selecting a new office space is its location, primarily its proximity to public transportation. A recent study by Environmental Building News found that the average commute to and from office buildings use more energy on a per square foot basis than the operations of that office building by as much as 30% for an average building and as much as 140% more for new, energy efficient buildings. Selecting an office location where employees can arrive by BART, bus, bike or foot is a critical component to reducing your company’s carbon footprint. If a location near public transportation is not possible, help employees organize carpools or group together with other small businesses to sponsor shuttles, carpools, etc. After minimizing commute miles as much as possible, check out www.green-e.org to purchase renewable energy credits (RECs) to offset the carbon impact of the remaining employee commute miles.
3) Green leases. If you are early enough in the process, work with your landlord to see if you can include green provisions in your lease. Green lease terms include energy auditing provisions, requiring green janitorial services and sub-metering.
4) Hire the right team. It will be a lot easier to green your space if you are working with an architect, contractor and mechanical, electrical and plumbing (MEP) subcontractors who have done green design in the past. You don’t necessarily need everyone to have green experience, but having at least the architect or the contractor proficient with green design is an important factor for a successful green project. Build it Green (www.builditgreen.org) maintains a list of green building professionals. Although they are primarily focused on residential, many architects and contractors who do residential have experience with small businesses. They could certainly refer you to others if they feel they are not the right fit.
5) Look for Rebates or Incentives. Contact the Smart Lights program (Berkeley and Oakland only) www.smartlights.org, SF Community Power www.sfpower.org, PG&E www.pge.com/mybusiness/energysavingsrebates/ or EBMUD www.ebmud.com/conserving_&_recycling/non_residential/ to see what incentives exist for small businesses, such as free energy audits and/or rebates to help offset the cost of energy and water efficiency upgrades.
6) LEED-CI. Check out the United States Green Building Council’s LEED for Commercial Interiors (CI) reference guide and rating system. Although the costs to LEED certify may be cost-prohibitive for a small office build-out, the reference guide is excellent, and can be a great resource for your team regardless if you pursue certification. www.usgbc.org/DisplayPage.aspx?CMSPageID=145
7) Bay Area Green Business Program – Contact the Bay Area Green Business Program at www.greenbiz.ca.gov for an inventory/assessment of your company’s home office. They will provide you with helpful advice and resources on how to “green” the day-to-day operations at your office and if you pass their checklist, they will give you the right to market yourself to the community as a Certified Green Business.
8) Indoor Air Quality
a. Selecting Interior Finishes. Thankfully, the green commercial product market has evolved significantly in the past 5-10 years, such that you are now able to find high quality green finishes for the same cost as conventional materials. The finishes you use in your office have a large impact on your indoor air quality – the key item to be aware of in interior finishes are VOC’s – volatile organic compounds – various chemicals, most importantly formaldehyde, that can off-gas from your office finishes for years to come.
i. Carpet. Look for companies that sell carpet with CRI’s Green Label Plus stamp. Shaw Contract Group, Interface, Bentley Prince Street and Collins & Aikman all make carpets that qualify.
ii. Non-carpet flooring – in your kitchens and bathrooms, consider using linoleum, cork, stained concrete, ceramic tile or stone instead of vinyl tile. The main component in standard VCT tile is vinyl chloride, which is a known human carcinogen – dioxin and hydrogen chloride are emitted from production and during building fires. Different scientists debate how much is off-gassed from the finished product, but I believe that there are enough suitable, cost-effective alternatives that it’s worth avoiding vinyl in your interior environments.
iii. Adhesives and Sealants. Along with paints, these viscous products are among the bad-boys of indoor air-quality. Make sure your architect specifies, and your contractor actually uses, adhesives and sealants that are water-based and low-VOC (volatile organic compounds), less than 70g/l. Go to www.greenguard.org and search their vast database for all types of low-VOC adhesives.
iv. Paints. Almost every company – Benjamin Moore, Sherwin Williams, Pittsburgh Paints - now makes a low or no-VOC paint. Benjamin Moore is one of my favorites in addition to some of the beautiful milk-based paints now on the market. Ask your architect or the Landlord to use only low to no-VOC paints with a maximum VOC content of 50grams/liter for flat paint and 150g/l for non-flat paint. The best rating criteria for paints is Greenguard’s “Certified for Children and Schools.” Visit www.greenguard.org or www.greenseal.org for more information.
v. Furniture/cabinetry – In addition to carpet, paint, sealants and adhesives, furniture and cabinetry are sources of formaldehyde in an office. Particleboard, found in desks, cabinets and tables, is one of the top offenders. It is possible to find alternatives – in fact several years ago, IKEA switched to formaldehyde-free particleboard. Ask your architect to identify formaldehyde-free furnishings, for example use Medite II or strawboard for cabinet cores and look into Baltix or Herman Miller’s furniture lines. Second-hand furniture is another great route – you can save money, recycle and get furniture that has already off-gassed most if not all of its original VOC’s.
b. Green Janitorial – So, you invested time, money and effort in selecting and installing green office finishes, but now the property management company sends a janitorial company around who sprays your space with chemicals every night – ARGH!
i. Green Cleaning - Talk to your landlord to see if their janitorial crew is already using green cleaning supplies, and if not, if they’d be willing to switch. Many companies are receptive, as it is safer for their cleaning crews as well as a marketing benefit to their clients and employees. Green Seal www.greenseal.org maintains a list of green cleaning supplies and green janitorial companies. Township Building Services, Inc. is one local janitorial company that has “gone green” www.tbservices.net.
ii. Pesticides – if you see crews with backpacks on their backs and spray wands walking around your office campus spraying pesticides – call your property manager and find out what they are spraying! If it’s pesticides, and they are spraying near your building, the pesticides could be entering the air intake ducts for your HVAC system and getting distributed throughout your space. Talk to your property manager and see if they’d be willing to convert landscaping to native plantings that don’t require pesticides www.stopwaste.org/home/index.asp?page=188 or use bio/ eco-friendly pest management techniques.
9) Energy and Carbon Footprint. Energy efficiency in offices is a huge topic, and volumes have already been written on the subject. There are a few key issues to highlight when talking about energy efficiency strategies for small businesses leasing space within larger buildings.
a. Sub-metering – In the past, PG&E would not allow a landlord to sub-meter electricity in multi-tenant buildings. This provided a disincentive for tenants to conserve energy or invest in energy saving technologies, as they had no way to measure and be billed for their actual usage. A major victory for energy efficiency was just won when PG&E recently changed its position, allowing building owners to install sub-meters for their tenants’ electricity usage. www.thelenreid.com/index.cfm?section=articles &function=ViewArticle&articleID=3312
The PG&E ruling is new, so if you don’t have a sub-meter for your space, the fact is that the financial benefit from any efficiency reductions you achieve will be spread across all tenants in the building, as landlords typically allocate operating expenses (including utilities), on a per square foot basis. You should definitely talk to your landlord or property manager about getting a sub-meter installed for your space. The problem is that the cost of sub-meters or E-mon D-mons are high (approx $2,500) and landlords may initially be resistant. However, if your lease term is long enough and you can prove your case in numbers, the savings may justify the upfront cost.
Another way to approach this is to negotiate a reduction in your upfront rent – if you can work with your electrical subcontractor to calculate estimated electricity savings of lighting and plug-load reductions that you make in your space and you can establish that conservatively you will save the equivalent of $.05 per rentable square foot per month, why not ask for that in a rent reduction upfront, or maybe the 5-year equivalent in additional Tenant Improvement Allowance to pay for the extra capital costs for your green features?
b. Lighting – Lighting is a key way that tenants can impact the electricity usage of their office space, and thereby its carbon footprint.
i. If the lighting is already in place when you move in, make sure the lamps are T5 or T8.
ii. Use LED or compact fluorescent lamps for all decorative and task lighting, and CFL’s in all downlights.
iii. Install motion sensors for all offices and utility rooms, etc.
iv. In larger open areas, use daylight sensors in conjunction with dimmable ballasts.
v. Remember to look for lighting rebates through PG&E www.pge.com/mybusiness/energysavingsrebates and organizations such as Smart Lights (serving Berkeley and Oakland) www.smartlights.org
c. Plug Loads – Plug Load is a term that represents the energy used by all equipment that is plugged into electrical outlets. The plug load of an office can be very high, depending on the equipment in the space and how it is used. Remember, even though equipment is not in use, it is still drawing a significant amount of energy if it is plugged into the wall. Strategies to reduce plug loads include:
i. Use flat panel Energy Star computer monitors, Energy Star appliances and Energy Star vending machines.
ii. Use “smart strip” power strips that stop plug-load drain for devices that are not in use, for example: http://terrapass.com/Merchant2/merchant.mvc?Screen=PROD &Product_Code=SS-SCG4&Category_Code=&Store_Code=TerraPass
iii. Ask employees to unplug non-essential equipment if they are the last to leave at night.
d. Package HVAC units – For wall-mounted package HVAC units for special purpose rooms such as small server rooms, copy rooms etc., specify units with a minimum efficiency of 13 SEER.
e. Duct Testing – The national average for duct leakage is 30%. This is a lot of energy to throw away due to gaps in HVAC ducts. Make sure that the HVAC ducts in your own space are sealed with duct mastic instead of duct tape and ask your landlord or property manager to have the ducts tested in the building. PG&E offers incentives for duct testing to small businesses: http://www.pge.com/mybusiness/energysavingsrebates /incentivesbyindustry/smallbusiness/duct/.
f. Renewable Energy – as a small business in a large multi-tenant office building, you may not be able to convince the landlord to install solar panels. However, as a small business you can invest in renewable energy and offset your carbon footprint through Green-e, a reliable local non-profit that has done the hard work for you by vetting various renewable energy credit suppliers. Check out their website at www.green-e.org/base/re_products?cust=b
g. Other – there are many other simple and creative ways to save energy and reduce your company’s carbon footprint, such as:
i. Telecommuting – allow employees to work from home when appropriate.
ii. Talk to your employees; see if they’d be comfortable with 1-2 degrees less heating/cooling.
iii. When it’s bright outside, turn off unnecessary lights.
iv. Unplug those phone chargers, printers and computers that are not in use!
10) Water efficiency – water efficiency options within your own space will be very limited if you are not installing your own bathroom. However, don’t let this stop you! If you educate your landlord and property manager, they may be receptive to switching out water-hog fixtures in common area restrooms and landscape irrigation. Solutions include:
a. Toilets, showers and faucets:
i. Low-flow fixtures on all sinks (maximum 1.25 gpm) and showers, (maximum 2.0 gpm).
ii. Waterless urinals – some municipalities require buildings to be piped for regular urinals, but you can still hang a waterless urinal fixture, and it will only use the “outflow” pipes. If you cannot use waterless urinals, then suggest low-flow urinals that use 1/8 gallon per flush.
iii. Use pressure assisted 1.0 GPF toilets or Dual Flush 1.0/1.6 GPF toilets with maximum MaP rating of 600 grams.
b. Landscaping – you may not be able to control the landscaping at the building, but you can certainly make suggestions:
i. Encourage your property manager to select native plants that require low to no water and pesticides.
ii. Install low flow (drip, bubblers or low-flow sprinklers) and weather-based irrigation systems
iii. Design irrigation systems to work with future or existing municipal greywater programs.
Last updated: 09.15.2008 11:34 AM
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