Last, the sublessor may allow a sublessee to use some or all of the furniture and equipment currently in the office space at little or no cost to the sublessee. As discussed more fully later, furniture, fixtures, and equipment can account for a large portion of the start-up costs of any business, including the professional services firm. However, as with office design and finish-out, the sublessor will have already incurred the cost of furnishing and equipping the office space that it intends to sublease and, as a result, may be willing to allow the sublessee to use its furniture and equipment during the term of the sublease. The cost of using the furniture and equipment presently in the office space can simply be rolled into the amount per square foot that the sublessee agrees to pay under the sublease. Alternatively, the sublessee can offer to purchase all or a portion of the sublessors furniture, which, as discussed more fully later, would still save the firm significant money over buying new furniture and paying for delivery. The subject of furniture and equipment is one of many potential points of negotiation between the sublessor and sublessee and may not even be an option if the sublessor is moving its entire business operation to another location. Nonetheless, in negotiating a sublease, the firm should consider these options.

Subleasing office space can be accomplished in different ways. The sublessee can assume a portion of an existing lease and share common areas and facilities with the primary tenant. On the one hand, such an alternative provides the firm with an opportunity to get to know the primary tenant and possibly obtain business and business referrals from the primary tenant. On the other hand, if the primary tenant is a competitor of the sublessee or there are other compatibility problems that cannot be resolved, sharing common space with the primary tenant may not make sense. One way to assume only a portion of the existing lease and avoid or minimize sharing common areas with the primary tenant is to construct a wall dividing the sublessors office space from the sublessee and construct a separate entrance. Such construction adds to the upfront costs associated with the sublease, and the sublessee and sublessor must determine who will pay for the construction. How much these considerations impact the agreement will depend on the individual firms need for privacy, security and a separate identity within the office space.

An alternative to assuming only a portion of an existing lease is to take over the entire lease. This type of situation often arises when the sublessor already has or is considering relocating its entire office to another location.

In sum, there are various ways in which the professional services firm can go about subleasing office space. Subleasing office space provides the firm with an opportunity to save significant upfront capital on a variety of fronts, including security deposits, rent, finish-out, and furniture. On the negative side, however, subleases are often shorter in term than regular leases, and the sublessee may be forced to cooperate and coordinate with the sublessor on common areas, reception management, signage in the space, security and privacy issues.

Leasing Agents

Once the firm has established its basic needs and requirements, it should consider retaining a leasing agent. There are numerous benefits to retaining a leasing agent. First, leasing agents usually possess a greater degree of familiarity with the landlords and properties in the area and the real estate agents representing such landlords. The real estate community in many cities is close knit, and leasing agents can provide the professional services firm with their valuable impressions about the quality and reputation of the landlords who are offering office space, as well as the history and quality of the properties in question.

Second, leasing agents almost certainly possess greater knowledge of the commercial office space that is available than the professional services firm. Commercial leasing agents are in the business of familiarizing themselves with many, if not all, of the various office buildings in a particular city. Thus, while the professional services firm might possess a limited amount of knowledge about certain office buildings in town, leasing agents should bring to the table deeper historical insights about many office buildings.

Third, leasing agents can provide valuable counseling and insight into various office needs and requirements that the professional services firm may have overlooked. Leasing agents are not only professionals who help the professional services firm navigate the office search and lease negotiation process but also counselors who will have a great deal of experience in working with tenants and understanding their needs. The professional services firm should take the time to explain the firms business model and goals to the leasing agent, who can then provide the firm with informed advice about the best leasing alternatives.

Last, as discussed more fully later, leasing agents often possess significant expertise in negotiating commercial office leases. The leasing agent may be able to help the firm obtain concessions from the landlord in the lease negotiations that the firm would not have considered or even requested. In almost all cases, the landlord is more sophisticated and experienced than the professional services firm in negotiating leases. However, the leasing agent can help level the playing field and explain any confusing or frustrating lease provisions.

When selecting a leasing agent, issues to consider and questions to ask include:

1. Who pays the leasing agents fees, and how are they calculated? Leasing agents fees are almost always paid by the landlord and range from 3 percent to 5 percent of the total value of any lease that is ultimately executed. The total value of the lease is calculated by multiplying the total square footage of the lease by the price per square foot by the term of the lease. Thus, if a five-year lease is executed for 5,000 square feet and

the price per square foot is $20, the leasing agents fee would be somewhere between $15,000 and $25,000.

2. What experience does the potential broker have in placing professional services firms? Agents with experience representing tenants in the retail and/or industrial context may or may not bring adequate experience and knowledge to the table in assisting with a commercial lease. Thus, it is important to ask whether the broker has experience in the commercial realm and, in particular, whether he or she has prior experience representing professional services firms. Within the professional services firm arena, some brokers may have more expertise with specific firm types, such as financial services providers, lawyers, consultants or medical specialists.

Similarly, it is important to determine whether the potential broker has experience assisting tenants with office space in the same size range as the professional services firm is considering. If the agent is used to dealing with larger clients and is actively representing a number of other larger clients, the firm might not warrant an adequate portion of the agents attention or obtain the full benefit of the services.

3. Is the broker licensed by or affiliated with any professional leasing organizations? Two of the more familiar and reputable leasing organizations are the Society of Industrial and Office Realtors (SIOR) and Certified Commercial Investment Members (CCIM).

Although in many cases it makes sense to retain the services of a leasing agent to assist in leasing office space, it is not mandatory.

Develop a List of Potential Office Buildings

Either with the assistance of a leasing agent or without, at some point the professional services firm should identify several properties that, at least on paper, appear to fit its needs and are in line with its budgetary constraints.

In developing a list of potential office properties, the firm should consider certain issues to narrow the list of properties to inspect. The leasing agent can prove invaluable in preparing a professional market survey that includes much of the following information and that, at least preliminarily, appears to meet the firms needs. Regardless of whether the firm retains a leasing agent to prepare a formal presentation, however, it can and should consider the following issues before it begins to conduct property inspections.

Location. Based on the information gathered during the preliminary assessment, it should be relatively simple for the firm to determine which of the potential office buildings meet its location needs. One way to accomplish this is to ask the leasing agent to prepare a map of potential office buildings,