When people purchase real estate, the popular axiom is Location x 3. Similarly, when businesses lease commercial space, they may be driven by specific compelling reasons related to location. In my career I have seen many corporate tenants make decisions based on traditional factors, and then others based on more original priorities. Recently, I heard of company executives that based their leasing decision on the landlord stocking an adjacent retention pond with 500 live bass so they could fish at the office during breaks. This is a very unique location-based decision. Others are more measured.
Business travel can greatly influence the location of an office. Many companies have guests from other states or countries visit, and close proximity to airports and hotels is important to them. Some of these guests may combine business with personal visits, especially in the winter when businesspeople visit Florida from colder climates. A location not too far from the beach or other popular entertainment venues might be considered in those circumstances.
Labor is an important factor driving corporate real estate decisions. In this case, employers may want to locate their office close to certain highway systems and public transportation lines. One consideration that is important to many clients of mine is to be located close to a county line so that they may easily draw talent from counties on either side. Another source of good labor is college campuses. These days many universities, like Florida Atlantic University (FAU) in Boca Raton, FL, feature office parks developed and operated as public/private partnerships. Some have great incubator spaces for early stage companies that can benefit from other entrepreneurial neighbors located in the same environment.
Some companies are doing work that is ‘mission-critical’. In these cases, they cannot risk losing power in the wake of a major natural disaster like a category 4 hurricane. Companies with a requirement like this may need to lease near a hospital or government building to benefit from their neighbor’s electric grid which should have redundant power and not have to rely on the functioning of a generator.
Another circumstance where location matters greatly is proximity to the courthouse for trial lawyers and hospitals for doctors. Also, businesses that do a lot of shipping and have late deadlines sometimes must be located close to a FedEx or UPS distribution center with late hours. A final example is an insurance company that I represent. They have extraordinary parking requirements at certain intervals. When they have this need for parking, the traditional allotment will be easily exceeded – so we need to account for that with a strategic location. In some cases this has been an office property adjacent to a shopping center, so excess parking can be off-site but close by. Neighboring religious institutions are also good excess parking solutions for office tenants during business hours.
Where is a better place for your company? Does your company have priorities like using certain telecom providers that do not yet have service everywhere in your market? How about close proximity to specific strategic locations? Perhaps it would be convenient if a fitness center or day care center were located on-site or up the block. What drives your relocation? For some companies, as with real estate investors, it is not at all about Location x 3 – but Price x 3. At Stagman Commercial, we can help you manage that priority also.