Coping With Leasing Trends By Maispace

By Author: Mel Joelle
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Owners and managers of commercial office rental properties are coping with an uncertain market as tenants themselves seek ways to weather difficult economic conditions. How tenants are responding to these conditions is revealed in an on-line poll posted by Commercial Property News in February 2009*. To the question "are your tenants/clients downsizing their space?" 20% responded that they are trimming slightly through hoteling/consolidation. Rightsizing through disposition/subleasing is undertaken by 34% while 19% said their space is just right. A surprising 26% of respondents said now is the time to expand.

For all save the ‘just right' response flexibility - or the ability to easily implement their course of action - is a great facilitator in completing the action, says Mark Bassil, vice president and co-founder of MAiSPACE, a modular office furniture systems manufacturer based in Mt. Olive, NJ. Attractive and ruggedly designed systems furniture can help facilitate each scenario.
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Hoteling provides a means of consolidation and is an outgrowth of an increasing trend dating from the ...
... early 1990s when firms began exploring it as a way to reduce costs through shared workspaces. The trend has grown as employees are becoming increasingly mobile or work from home by telecommuting certain days of the week. Organizations have responded by creating what is sometimes called 'touch down' spaces that co-workers can use when they need to be in the office. Spaces are assigned on an ad hoc basis. Staff members are assigned a cubicle, plug into the company local area network and do their business.

In this instance the benefit is reduced floor space and lower rent, Bassil says. While building owners or managers may not be happy with lower income, lower is better than no income if the tenant moves out.

Systems furniture such as provided by MAiSPACE serves several roles in a hoteling environment. One is that it helps overcome the emotional impact on employees who may attach a sense of self to their workspaces no matter how much or how little time they actually spend in it. "In this instance attractive designs help provide a sense of individuality," Bassil suggests. "It is achieved by using panel and wall elements combining clear, striped, frosted or patterned glass; wood, fabric, painted steel and stainless steel staggered throughout the office areas. Mobile storage and filing systems equip employees with dedicated cabinets that hold not only their relevant files but personal items as well, and which can be kept in a central storage area when the employee is working elsewhere. This supports 'personalization,' the lack of which is one of the biggest arguments against hoteling." Ergonomically designed easily adjustable task seating exemplified by MAiCHAIR enables employees to customize their chair when in the office.

The modularity of systems furniture supports tailoring workplace floor space to the size of the staff and easily solves rightsizing issues. "Moves, adds and changes (MACs) occur in any business environment," Bassil points out. "Fixed walls, heavy freestanding desks, tables and files inhibit rightsizing whereas unneeded modular panel elements are easily removed and stored until staffing increases. Moreover," he adds, "MAiSPACE movable full walls provide a fast economical means of defining a smaller floor plan and facilitate subleasing unneeded space by creating a completely separate space."

Rugged MAiSPACE structural framing and panel elements easily handle the stresses and strains placed on them when being moved, stored and relocated. Inferior designs are subject to bends and distortions that make reassembly difficult if not impossible.

Optimists taking advantage of lower real estate costs by expanding their facilities also benefit from economies offered by modular office furniture systems. "We support these forward thinkers in several ways," Bassil says. "One is through our extremely attractive pricing structure, which is based on our unique approach to manufacturing and supply chain strategies. This allows us to deliver fully furnished, ready to move in offices from starting at $12 to $15 per square foot. These price points, which average 40% below some of the best known names in the contract furniture industry, are not at the expense of quality. MAiSPACE backs up its products with a lifetime warranty and guarantee against obsolescence."

As a means to improve cash flow, MAiSPACE has leasing option for its dealers and distributors to pass on to prospects. "For example, fitting out 20,000 square feet for a 4-year term comes to $7,521 per month installed or $0.38 per square foot. Buying the equipment outright would cost $300,000 based on our installed cost of $15 per square foot," Bassil says.

Today more than 80 percent of U.S. companies lease some if not all of their office furniture, equipment and technology acquisitions. Compared with other financing methods leasing is easier than securing bank loans and is just as competitive. Payments are fixed instead of being based on floating interest rates, and leases can be structured to support the needs and goals of a business, not the bank.
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