In this episode of Brandstorm, we welcome Dan Jessup, executive vice president of Jones Lang LaSalle’s Wisconsin office. Dan joins us to discuss why the location you choose for your business is so important, and what to look for when starting up or moving.
A commercial real estate broker for over 27 years, Dan explains that one of the main differences between residential and business real estate is that the former is fueled by emotion, while the latter is based on facts. Examples can include demographics, average income per household or the population within a 5-mile radius. A business owner may not have a handle on those aforementioned statistics, which is where a broker can truly assist. Brokers have a wealth of market knowledge, experience in your business’ field and understand current market conditions.
Jones Lang LaSalle
For over 250 years, Jones Lang LaSalle (JLL) has been a trusted partner to organizations who want more value from the commercial real estate they own, use or invest in. An international Fortune 500 company, JLL’s 70,000 employees deal with every facet of commercial real estate – from transaction management to construction and design management – in 80 countries.
Current Commercial Real Estate Trends
Though trends come and go, Dan states that millennials are contributing to offices being more collaborative in nature. Gone are the days of corner, private offices and in their place are more communal workspaces. The current average occupancy per 1,000 square feet is about 6-8 employees, up from 4-5 within the last five years. These staff members spend less time at their desks, more time working from home (or from a separate, third location) and more time collaborating with others on premises. Technology has also made a lot of space initially needed for computer towers, server rooms or paper files obsolete.
Is It Better to Buy or Lease?
This is an important question with no good answer, Dan tells us. If you’re in the market to purchase, it’s key to know the ROI of your own company first. If that number is above 10%, Dan recommends investing back in your own company versus in real estate. If your business is experiencing fast growth, you may want to look into leasing, especially from a landlord with multiple properties, in the event that you need to relocate or your company outgrows your original space.
What Questions Should You Ask a Broker?
Dan suggests that since the industry has become so specialized, business owners should work directly with brokers within their city who deal directly in their field, whether that’s retail, office, or warehouse space. He also mentions that a great broker should know more about your own location than you do! By working with someone who is well-versed in your arena, you’ll easily be able to vet a broker by inquiring about the tenants they’ve served or currently work with, what lease terms they’re under and how recent those agreements are.