Local San Jose space provider and building manager Todd Gaches shares his great experience using Rofo. Thanks for being a great Rofo user Todd!

Todd used Rofo.com to list commercial space at 2150 Tradezone Blvd., a building he manages in San Jose, California. After two months on Rofo, even in a tough market, he found two new tenants to occupy space in his building. Todd did pretty much everything he could to get his spaces viewed and tenants to tour. He definitely utilized most of the suggestions in the previous blog entry of 10 Tips on Leasing Space.

Some of the things Todd did:

• Priced his listings creatively, offered start-up companies reduced rent for the first year
• Used Rofo to distribute his listings to craigslist to get as many views as possible
• Provided pictures and videos for all spaces at 2150 Tradezone
• Divided larger spaces into smaller spaces that are more suitable for current market conditions
• Listed every space in the building as a separate listings, giving him more content to distribute
• Took advantage of Rofo’s premium listing service
• Responded to tenants quickly and professionally, often arranging tours within a few days of contact
• Was flexible with tenants on move in dates and lease terms.
• Created unique, descriptive and informative titles and descriptions for each listing

Take a look at Todd’s current office space listings on Rofo.

1. Distribute your Listing Everywhere
There are so many free distribution channels online these days that you do yourself a disservice by not using them. Listings should be distributed all over the place! Put them on craigslist, Rofo, send them to Linked in groups, Facebook groups, make a video on YouTube, tweet your listing. All these distribution channels are free, use them!

2. Pictures and Video
If a Rofo user is given the choice of a listing with pictures or without, the listing with pictures always gets more views. People want to see the space they might end up working in. If you have pictures available put them on your listing. If you don’t have any, take some! Or pay someone to do it. The pictures don’t need to be professionally done, but at least take them on a sunny day. People don’t say a picture is worth 1,000 words for nothing.

Videos take it a step further and give prospective tenants an even better sense of the space without having to be there physically. Videos are difficult to produce, so either take the time to do some research on techniques that produce good results, or hire a videographer to do it. Good looking high end spaces definitely benefit from professional looking photos or videos. Craigslist is a great place to find photographers and videographers at reasonable prices.

3. Space Size
Don’t lump 10 different spaces into one listing. If a user is searching by size how are they going to find that 1000 sf space they are looking for if it is hidden in a listing with a range of 200-2000 sf? If the space has been separated with a build out, then those spaces should each have separate listings. Plus, it increases your chances of listings views since there is more content to distribute.

In this market, smaller listing are being leased much more quickly than anything over 5,000 sf. This is due to a variety of factors, such as downsizing, subleasing and people who have been laid off starting their own businesses. Moral of the story is don’t ignore smaller tenants or neglect to market smaller spaces, even though the reward isn’t as great when compared to leasing a large space. And who know, that small tenant may end up becoming a large tenant when the economy recovers (anyone’s guess to when that will be).

4. Be Flexible on Lease Term
We are still in a recession, no matter what Bernanke says. Businesses are apprehensive about committing to a long term lease because the economic outlook is fuzzy at best. Don’t scare them away by forcing them into a 5 year lease.

Also, be very clear when the space will be available. If you are flexible on timing, say so in your listing.

5. Pricing (Price your listing and don’t hide expenses)
Be as clear and upfront as possible about price in your commercial listing. Sure, you want to leave room to negotiate, but users of Rofo rarely click on spaces that are unpriced. If you know what the expected expenses are for a certain space, add them to the description. If you want to advertise any special offers like free rent, offer them in the title or description.

Sure NNN expenses fluctuate, but you can make a pretty good estimate. Tenants don’t appreciate seeing a low rental rate and then finding out it doesn’t include $1.50 in NNN expenses on top of the base rate.

6. Price Creatively and Competitively
A tough economy forces most businesses to make decisions based on the bottom line. Pricing a listing above market rates will cause many tenants to look elsewhere. Take a look at the market and other spaces in your area on Rofo and price accordingly.

One of the most successful space providers on Rofo offers a 3 year lease wiht a low monthly rate for the first year which then scales up over the following years. This allows tenants to get into a space at a price that takes into account the tough economic environment.

7. Keep the Tenants You Have!
If a tenant is mulling the idea of leaving do everything you can to keep them in the building. In this market it will be extremely tough to find a replacement. Don’t grovel, but make some concessions and be flexible. Also, having prospective tenants tour an empty building isn’t exactly great marketing.

8. Title Listings Descriptively
Users on Rofo view listings with descriptive titles twice as much as non-descriptive titles. Think about words that tenants would identify with and are descriptive. Try to describe what you feel are the best features of the space and identify them in the title. Some good examples could be:

-High end space in high rise downtown, great natural light and four offices
-Great space with parking, ideal neighborhood for a start up
-Nice space for a non profit, most current tenants NPO’s

Listings with descriptive titles on Rofo always get more views than listings with generic titles. Think about words that they would identify with and are descriptive. Highlight the best features of the space and identify them in the title.

9. Create Comprehensive Listing Descriptions
Many Rofo users search based on specific types of space or for spaces that are targeted towards specific uses. Make sure include sublease or shared space opportunities as they are very desirable for those smaller tenants and tenants seeking short term space.

If you feel your space is a great opportunity for a non profit, start up, or professional service firm, identify this in the description. Build out, amenities, and other special features of the building should be identified as well. Make sure to describe things like available parking and nearby transportation options.

10. Be Flexible
This is more of a concluding statement about leasing in a tough economy. Be flexible and do your best to meet tenant demands. In this market, if you don’t, somebody else will.

Here at Rofo we help businesses succeed by helping them find the ideal commercial space. However, there are many other things a small business has to worry about after they find their space. Small business marketing is always a challenge and tough to quantify, especially during an economic downturn, like the one we are currently experiencing. So today we have a post from guest blogger Trynka Shineman, chief marketing officer of VistaPrint North America.  For more information on VistaPrint go to www.vistaprint.com.

Your small business is operating in a time where things are uncertain. Business coming through the door might be spotty, customers seem to be spending less, and making the bills is a much bigger struggle than it once was. But that doesn’t mean that customers aren’t out there to be had. People are still spending money, and they still need what you’re selling, just like they did a year ago. The key is doing the little things to bring in business, and that includes creative marketing. You might think that marketing in a recession is impossible because of the costs, but staying on top of mind with customers and letting them know that you’re still there for them is paramount in a down economy. Marketing to customers that you have already served, as well as working to bring in new ones can pay long term dividends through any economic downturn. It also doesn’t have to be expensive if you have a little know how and creativity.

When most people think about marketing, they think that it’s going to be too cumbersome in terms of cost to achieve any kind of results. The truth is if you use your creative mind and do things a little bit differently, you can still make a marketing impact while tightening your belt. Here are a few things you can do to keep yourself out there and in the minds of customers for a very small investment. Steps like these can be the difference between keeping your doors open and having to close up shop in tough times.

Focus on existing customers

It’s an old marketing mantra: acquiring new business costs exponentially more than retaining the customers that you already have. In difficult economic times, this rule is one that you should stick to. Keeping the customers you have is absolutely paramount. Existing customers already know your business and the level of service you provide, and can to some extent vouch for you and even recommend you. Nothing generates business like word of mouth, and referrals are still one of the biggest drivers of new customers to a business.

You shouldn’t shy away from asking for referrals – even give customers tools to make referring others to you easy. In tough times that means handing out business cards, or if you have extra budget, brochures that can be used as easy handouts.  But instead of handing someone just one business card, give them a few.  The odds of them falling into a new customer’s hand will increase.

You can even also do things to encourage repeat business with existing customers. It’s easy and cheap to print up business cards with frequent buyer boxes on the back. For every third order a customer places with you, give them a special offer. As you check off the boxes, with a special stamp or mark, the customer will know they are close to a freebie or deep discount. Make the incentive meaningful so the card with your contact information will be kept and hopefully acted upon when seen again. Giving a customer an incentive will keep you on top of mind, raise loyalty for your business, and also the chance that they will refer you to a friend.

This is a good example of how a small investment can yield big results. All you have to do is use your creativity and do things a bit differently to bring business to you.

Get a web presence

Traditional advertising spending, which has included newspaper, magazine, and other print publications continues to decline as the readership and circulation of these mediums continues to go down. More and more customers are moving online to find the products and services they are looking for. Small businesses that can’t be found online and through local searches are missing out on potential business. Getting your own web presence is also very easy. Many companies offer Website packages that are even under $5.00 per month. You can design your own site and include your products or services, your contact information, pricing, and where you are available. Oftentimes you can even sell your products online using even basic packages, taking payments online and driving additional sales.

Online search engines like Yahoo!, Google and MSN have also devised ways to increase your search results, and can help you use tools to get noticed in local searches and keyword searches. If you have extra budget, you might even want to consider making some inroads into the world of paid search marketing, which can reap big benefits when done effectively.

When you have your own Website, you have another avenue for customers to find out about you and contact you directly. You can add your web address to your traditional networking and marketing materials as another point of contact. As more and more consumers go online, they will come to expect your business to have an online web presence. If you don’t, they could very easily move on to a competitor who does.

Be creative, stay visible and keep testing!

Now more than ever you need to use your business savvy and marketing creativity to drive business and keep your customers, even if it means doing so on a shoestring budget.

Some types of marketing are relatively cheap and when done correctly, and effectively. For example, traditional direct mail can still work, especially for retaining your valuable customers. And it’s not as expensive as you think. Postcards can be ordered for a low-cost. Oftentimes you can get 100 for under $25. You could mail them out, or to save money on postage you can design one with a coupon or special offer, and either give them away at your shop to entice people to come back and buy at a later date, or put them into shipments as a box insert. When people open their package they can get a postcard with another special offer or a coupon for money off their next order, which they will encourage them to buy again.

If you haven’t yet, you can try to get visibility with signage including car door magnets, or lawn signs. Keeping visible keeps you top of mind with customers who may need your product or service.

But the one thing that you can’t stop doing is marketing. The strides you make now will sustain you through these tough times but can also be used anytime to drive business. Tried and true methods that don’t take much of an investment should be done in both good times and bad.

Marketplace.org takes an insightful look at the current conditions in the commercial real estate sector. Although the Term Asset-Backed Loan Facility (TALF) and the Public Private Investment Program (P-PIP) are quietly keeping commercial real estate on life support, there are now signs that more assistance may be needed. If the unemployment rate exceeds 10% as expected, the elevated office space vacancy rates in commercial real estate will also increase. The jobs issue is becoming more pertinent as the consequences of extended high unemployment begin to reverberate through the economy. In fact, U.S. office vacancies hit a 5-year high of 16.5% in the 3rd quarter alone.

TALF has extended billions of dollars in loans to debt burdened developers in an attempt to keep the commercial real estate domino from falling. One of the biggest issues is the banks continued refusal to mark down any commercial real estate backed assets. Basically, banks are crossing their fingers and hoping that a recovery comes sooner than later, with the possibility of dire consequences if it ends up being later.

Do you work independently or freelance, but occasionally reminisce about the cubicle neighbors you left behind, even though they sometimes annoyed the hell out of you? Does freelancing get a little lonely, or do you wish you had someone to bounce ideas off of and collaborate with? Then Coworking might be for you. Brad Neuberg, a computer programmer in San Francisco, started the Coworking movement in 2005 as a middle of the road solution between working for a soul crushing corporation and working independently. Instead of clicking away at the keyboard on the couch in your undies, Coworking spaces bring likeminded freelancers and independent contractors together into communal offices.

Coworking provides the camaraderie, structure and social interaction usually missing from the freelance lifestyle. The offices usually implement an open floor plan with desks and a few cubicles. Most usually include a communal meeting room and some kind of kitchen area. The prices range from $10 per day to around $400 or $500 per month for your own personal desk space, with many options in between.

It’s a great solution for people who don’t want to commit to an extended office lease since most Coworking spaces operate on a month to month agreement. If you are a freelancer, contractor or consultant, a Coworking space offers an alternative to the sometimes stodgy office suites.

The movement has been catching on, fueled by an increase in freelancers, a prevalence of vacant office space and the grassroots nature of the movement. The whole movement is very connected and the Coworking wiki and blog help foster development of new Coworking spaces. Although the movement began in San Francisco, Coworking offices continue to spring up around the world and exist in most large cities. The basic model is very altruistic and flexible with some spaces allowing people to hang out for a few days before making a commitment. The main idea is to build a tight knit community, where people work and interact, through the shared space.

View Coworking in a larger map

New York isn’t exactly known as a hot bed of start-up company activity, but as the economic down turn drags on the city is trying to change that by helping out their small business and start-up community by funding affordable incubator office space. With a plethora of office space available and some businesses in need of a helping hand (i.e. one business using 175 sf for 6 people), it seems like the perfect time to offer a city funded startup incubator. New York plans to launch similar incubator spaces in all four boroughs.

As entrepreneurship becomes a function of necessity rather than opportunity and credit remains crunched, this is a great solution to help businesses get off the ground.

I’ve read a lot about how to navigate the confusing terms and conditions in the legal contracts startup founders must sign. But what about rent? It’s probably one of your biggest operating costs, and in the current spirit of cost-cutting, there are several ways to squeeze cash out of your commercial real estate agreement, too. I started Rofo to help entrepreneurs do this, but I’ve shared my top “lease agreement hacks” here. They will save you plenty of headaches and money — and possibly even help you generate new revenue streams for your startup.

1. Don’t pay for space you can’t use. All square feet are not created equal. Have the landlord pay for a “space plan” to determine your “load factor.” (Also sometimes referred to as a “loss factor.”) This is the ratio between the non-usable and usable square feet that your rent will cover. Examples of non-usable square feet would be building common areas, such as corridors, or a lobby. Typically, office space load factors are in the range of 20 percent to 30 percent, meaning for 1,000 square feet of usable office space, you might pay for 1,200 square feet. Landlords like high load factors because they pad the bottom line. In a market like this, however, they need to secure tenants, so you have more leverage than normal. Negotiate the load factor down to at least 15 percent.

2. Beware of free rent. Structure the rent so that you phase into the space. Pay for half the space during the first six months of the lease, the full space at seven months. If you get “three months free,” be sure the landlord has not extended your lease term on the back end, to 39 months from 36, a common tactic.

3. Avoid standard improvement allowances. If the rental rate being offered includes a standard improvement allowance and you do not want or need to make improvements, then amortize this allowance out of your rent.

4. Cap operating expenses. In most office buildings, operating expenses are included in your rent. They increase yearly, but you can put a cap on operating expense increases. A 5 percent cap is reasonable. It protects you from spikes in utility costs or increased property taxes if the building is reassessed. Also, retain the right to audit operating expenses.

5. Negotiate your renewal option in advance. Landlords like to include a commitment to renew up to one year before your lease is up. This forces you to address your real estate needs long before you’re ready. Negotiate the renewal down to six months by agreeing to a renewal rate equal to fair market value. Renewal rates are re-negotiated at re-signing anyway. The important thing is to move back the option deadline.

6. Negotiate holdover rent penalty in advance. Holdover rent occurs after your lease term has expired and, for whatever reason, you’re unable to vacate the space on time (usually when your pending move is delayed). Landlords will want double rent as a holdover. Negotiate this down to 125 percent of current rent.

7. Consider a buildout. If a landlord offers an allowance to build out a space to your specs, take the time to get a construction bid. Make the landlord pay for the estimate. Be sure the allowance can be used for architects, construction management, your moving expenses and data wiring. Most landlords draw the line at furniture and fixtures, but ask for it.

8. Demand right to sublease. Get it in the term sheet that you can sublease your space to anyone you wish for any amount of rent, subject to an approved use. Also, be certain that the landlord cannot impose any fees to your sublease. A common fee to avoid is a “document review fee” to cover the landlord’s attorney bill. Also, insist that the landlord turnaround sublease approvals quickly, within three to five business days. The last thing you want is to lose a subtenant to administrative delays.

Office suites, also known as executive suites, provide a very unique office space experience. Sometimes they are classified as shared office space or a sublease office, but really aren’t either of those. Office suites are set up and managed by a company whose sole business is to lease and mange that space. They are a great solution if your business needs a flexible lease term since office suites provide hourly, month to month, or longer term offices. It’s also great if you want a smaller office in a prestigious location, with office suite locations in swanky zip codes around the world. Suites include many built in amenities out of the box, such as conference rooms, phone, internet, answering services and printing, but these are usually accompanied by additional fees for their use. Office suites are very flexible, but that flexibility usually doesn’t come cheap. You will usually pay a slight premium for your office suite space over a more informal shared space. Usually that premium is worth the flexibility and the professional image provided to for your business. If you are a consultant or salesperson, or travel extensively and need a place to work on the road, office suites are a great solution since they offer memberships that provide access to work spaces in many different cities. However, this is usually limited to the bigger providers, such as Regus.

Although business suites are great for smaller companies, keep in mind that they do not scale very well when your business starts growing. Once you begin to occupy more executive suite space, you will tend to get better economies of scale from a traditionally leased space. Plus, if you want flexibility with the interior of your office space then office and executive suites might not be right for you since most of the interior is pre-packaged decor and furniture.

Who is office or executive suite space for:

• Small to medium sized business looking for a straighforward short term solution
• Consultants or sales people who need a work space option while travelling
• Business looking to for a virtual office, or an office only a few times per week
• Businesses who want to portray a professional image, but don’t want the restrictions of a long term lease

Pros of Office/Executive Suite Space:

• Get into the space quickly
• No up front capital expenditure (All services packaged together)
• Flexible lease terms
• Professionally managed space
• Fully equipped to handle all office needs out of the gate
• Usually 24/7 access

Cons of Office/Executive Suite Space:

• Usually must pay for use of amenities
• Space usually “As Is”, limited customization
• Amenities are shared, you don’t choose who you share with
• Limited expansion options
• Location are limited

A traditional sublease is when your business takes over a space and lease from another business.  Companies sublease space for many reasons including: relocation, downsizing, moving, failure, expansion, and restructuring.  When subleasing, it is typical to get discounted rental rates, especially if the overall commercial market is suffering.

If your company wants to be located in a certain area, but a direct lease isn’t in the budget or you want a flexible lease term then search for a sublease instead.  It usually requires a little more homework and searching, but the extra work pays off with a more affordable and flexible lease.  Another reason a sublease is great for younger businesses is that it lowers the initial cost of occupying an office.  A sublease allows you to get into a space quickly and with minimal expense, because a subleases are usually built out (furnished, wired, etc.) and tend to be available immediately.

Particularly for small firms, sublets are often better than direct leases because the shorter term lengths are ideal for companies just getting started, taking on new projects, or scaling back. However, keep in mind that relocating and moving offices can be disruptive and costly, so you should always keep in mind how a short lease will fit into your long-term business plans.

Who is sublease office space for:

• Small to medium sized business
• Companies with uncertain future
• Business looking for flexible lease
• Business looking to keep overhead costs low

Pros and Cons of Sublease Office Space

Examples of Sublease Space on Rofo

A direct commercial lease is an agreement between your business and a landlord for you to occupy a space for a specified amount of time. It is beneficial to have an experienced broker assist you with the leasing process if you go this route.  A direct lease is preferred if you are a stable well funded business whose future looks bright. A long term direct lease also gives you negotiating leverage with the landlord.  If you are looking for a lengthy term lease (3-5 years) you should be able to get some concessions, especially in the currently depressed market.

Here are some important things to think about before signing a direct lease agreement:

Length of Term: A long-term lease is a large burden for any business, especially if you are a small or medium sized business in today’s unstable market. Don’t let anyone talk you into a lease term you are not comfortable with.  If you are a small business try and negotiate a lease term that is 1-2 year range and then discuss the renewal clause. Long term commitments usually benefit the landlord and severely limit your options if you outgrow the space, downsize or need to change locations. Landlords do not have incentive to find a subtenant if you break the lease because you are liable to pay for the entire term. Try and think about your lease as a total obligation instead just a monthly obligation.

Renewal Clause: Make sure you take a close look at the renewal clause. An unfortunate renewal clause could force you to move or sign a renewal for a term longer than you might need. Also determine what you want your options to be at the end of the lease. If you are planning to vacate the space the renewal clause is not as important, but if you are planning to stay make sure the renewal clause clealy states length of the renewal term and any rent increases.

Get it in Writing!: Never rely on an oral transaction, all terms should be in writing. Important things to be clearly written into the lease agreement:

• What is the landlord responsible for fixing
• Renewal option
• Common area maintenance fees (CAM), or any other costs that get passed along in a Triple Net (NNN) lease
• Tenant improvement allowance
• Security deposit terms
• Specifis of your personal guarantee of the lease
• Late charges on rent
• Insurance requirements, almost all leases require this, meet with a commercial insurance agent

Who is a direct lease for:

• Medium to large companies
• Well capitalized companies
• Companies with good cash flow
• Companies with a stable business not subject to volatile markets
• Companies wanting to occupy an office for an extended period of time (over 1 year)

Current Market Conditions: Current market conditions favor the tenant since there is copious amounts of space available. Do your homework on what the market has to offer and consult a commercial broker for additional help. When negotiating do not let the landlord push you into something you are not comfortable with since there is probably a similar space right down the street, but still remember to be reasonable!