TL;DR
- Define occupancy economics before scheduling tours — base rent is rarely the most important number.
- Use a four-axis framework: base building, location, lease economics, and amenitisation.
- Insist on a side-by-side total-cost-of-occupancy spreadsheet across the shortlist — including TI, op-ex, taxes, and concessions.
- ESG performance now drives a measurable rent and resale premium — model it explicitly.
- Default to a tenant rep who is paid only by the landlord; never engage the landlord's listing agent as your sole adviser.
Start with occupancy economics, not buildings
Most office searches begin with tours. They should begin with a spreadsheet. Build a total-cost-of-occupancy model for at least three scenarios: status quo, a target headcount, and a stretch headcount. Include base rent, operating expenses (or service charge in EMEA), real-estate taxes, fit-out">fit-out (amortised), parking, and a reasonable estimate of the broker fee. Only then do candidate buildings have meaning. Compare candidates in **per-seat per-month USD**. That single normalised number cuts through psf vs psm, gross vs net, and currency noise. Our Occupancy Cost Calculator produces that number directly.
The four-axis framework
**Base building.** Class rating, year built or last major reposition, mechanical and HVAC age, structural floor-to-floor heights, slab-to-slab clearance, glazing performance, MEP capacity, and the elevator strategy. Every architect can read these from a drawing set in 20 minutes — make them. **Location.** Commute economics for your actual headcount, not the abstract. Pull a transit isochrone map. Score talent catchment. Factor adjacent amenity (food, fitness, hotels). Walk the block at 8:45am, noon, and 6:30pm. **Lease economics.** Base rent + escalations + free rent + TI + termination optionality + sublease rights + expansion options. The marginal extra year on a term is the cheapest negotiating lever — use it. **Amenitisation.** Tenant amenity floor, conferencing, food, fitness, end-of-trip facilities, building events. Trophy buildings increasingly compete on these — and they have meaningful retention impact.
Loss factor matters more than usable rent
Class A landlords typically quote rent on a **rentable** square foot basis. Your usable area is smaller — the difference is the loss factor (sometimes called add-on factor or core factor). A 25% loss factor on a 30,000 rentable sqft floor leaves 22,500 usable. On a 20% loss factor it's 24,000. That 1,500 sqft difference is real money — and it's the most under-modelled variable in any first-look comparison. Always normalise to **usable** when comparing buildings.
Engage a tenant rep, not a transaction broker
The standard market structure pays the tenant's broker out of the landlord's commission pool. That means tenant representation is effectively free at the negotiating table — and forgoing it is the most expensive single cost-saving in the search. Hire a broker who represents only tenants, ideally one who has worked the specific submarket for at least five years. Pay attention to recent comparable transactions — those are the negotiating ammunition.
Insist on the side-by-side
At the end of every shortlist round, demand a single spreadsheet from your broker that compares all candidates on identical assumptions: term length, free rent treatment, TI treatment, operating-expense pass-through, and seat density. Most brokers will deliver this; the ones that won't are not the right partners.
Frequently asked questions
- Should we lease for the headcount we have or the headcount we want?
- Both — and explicitly. Lease for current headcount with a contractual expansion option (a right of first offer or a hard expansion right) sized to the stretch case. Hard expansion rights are the most valuable and the most expensive — negotiate them early in the LOI.
- How long should the search take?
- Plan for four to eight months from kickoff to lease execution for a Class A requirement of 5,000-25,000 sqft in a major market. Larger or trophy requirements take longer due to landlord covenant approvals and lender consents.
- What is a reasonable broker fee?
- Tenant rep brokers in the US are typically paid a commission equal to the present value of one to two months' base rent for each year of the term, paid by the landlord. In Europe, fee structures vary — check before signing the engagement letter.