Office, retail or warehouse: how to choose space that fits the way your business works

The answer in brief: start from how the business operates

Choose commercial space by defining how your business operates first, then testing each property against that list: who comes to the space and how, what the work needs physically, what the zoning and occupancy rules allow, and what the total cost will be over the term. Owners who start with listings tend to fall for a building and then discover it fails one hard requirement. Owners who start with an operating profile can rule out most of the market in an afternoon and spend their time on the few spaces that truly fit.

I have worked in office, retail and industrial real estate since 1999, starting at The Staubach Company, and I have run a retail business from leased space myself. The questions below are the ones I walk through with every client before we tour anything.

Write the operating profile before you tour

A one-page profile keeps the search honest. It also gives a broker, a landlord's agent or your own team a clear standard to measure each space against, so the decision is not made on the drive home from the prettiest tour.

Separate the must-haves from the nice-to-haves while you write it. Dock doors for a distributor, a ground-floor entrance for a clinic or walk-in visibility for a store are non-negotiable. A view, a fitness center in the building or a particular street address usually are not. Owners who mark the difference up front make faster decisions and avoid paying a premium for features nobody uses after the first month.

• Headcount today and in three years, and how many people are on site on a typical day
• Who visits: customers, patients, clients, vendors, delivery trucks, or nobody
• Physical needs: private offices, open work areas, showroom, storage, dock doors, ceiling height, power
• Parking for staff and visitors, and whether it must be close to the door
• Signage and visibility, and how much they matter to how customers find you
• Hours of operation, including evenings and weekends
• Budget expressed as total monthly occupancy cost, not just rent

What office users should weigh

For office space, the layout is usually the biggest variable. A suite full of private offices suits a law or accounting practice and frustrates a team that works collaboratively, and changing the layout costs money. Look at how much of the space is usable versus common area, how natural light reaches the work areas, and whether conference rooms are inside your suite or shared in the building.

Building systems matter more than tenants expect. Ask how heating and cooling are controlled and billed after hours, whether the building has the internet providers you need, and how security and after-hours access work. Then think about the people: commute times for the staff you have and the staff you want to hire, restaurants and services nearby, and how the building presents to a client walking in for the first time.

Finally, consider how the suite could change if the business does. Ask whether the landlord controls adjacent space you could expand into, whether you could give back part of the suite, and how easy it would be to sublease if plans shift. Those rights cost little to ask for at the start and a great deal to try to add in the middle of a term.

What retail tenants should weigh

Retail is where my own experience as a business owner shapes my advice most. The space has to bring customers to you, so visibility from the road, ease of turning in and parking, the strength of neighboring tenants and the direction of traffic at the hours you are open all matter as much as the square footage. A great space on the wrong side of a divided road can underperform a plainer one on the right side.

Read the lease for the clauses that affect operations: permitted use and exclusives, which control whether a competitor can open next door; co-tenancy, which can matter if a key anchor leaves; required operating hours; and signage rights on the building and any monument sign. For a storefront, the sign is part of the space, and the rules come from both the landlord and the city. This guide on getting the storefront sign, permit and landlord approval right covers that process in detail.

Spend time at the site on the days and hours you expect to be busiest. Count cars, watch where people park and how they walk, and notice whether neighboring stores draw the same kind of customer you want. That hour of observation has told me more about a retail location than any marketing package.

What industrial and warehouse users should weigh

Industrial decisions come down to how goods and equipment move. Measure clear height, which determines how high you can rack. Count dock-high doors and grade-level doors, look at truck court depth and whether trucks can turn safely, and check the column spacing against your racking plan. Ask about electrical service capacity early, because upgrading power for production equipment can be slow and expensive.

Location in industrial is about access more than image: proximity to highways, to your customers and suppliers, and to the labor pool you rely on. A flex building with some office finish and some warehouse can suit a company that needs both, but confirm the office-to-warehouse ratio matches how you work, since too much office finish in a warehouse lease is space you pay for and do not use.

Zoning, permits and the certificate of occupancy

The U.S. Small Business Administration advises that any property you buy, rent or build should conform to local zoning requirements, and that zoning is handled by the city. That sounds obvious, but I have seen owners sign letters of intent on space where their use was not allowed, or allowed only with extra steps. Confirm the use before you negotiate, not after.

Cities also control occupancy. The City of Dallas, for example, states that a new certificate of occupancy is required for the first use of a building, a change of use, a change of tenant on an existing certificate, or a change in floor area. Suburban cities have their own versions of the same rule. If your use differs from the previous tenant's, the change can trigger requirements for parking, fire protection or accessibility that cost real money.

Accessibility applies to the build-out as well. The Texas Department of Licensing and Regulation states that projects with an estimated cost of $50,000 or more must be registered and reviewed by a Registered Accessibility Specialist, and that smaller projects must still meet the Texas Accessibility Standards. Ask your architect or builder to flag these items before you commit to a space.

When there is any doubt, ask that the letter of intent and the lease make your obligations depend on obtaining the permits and the certificate of occupancy your use needs, or give you a way out if they cannot be obtained. A landlord who is confident in the space will usually discuss reasonable protection of that kind.

Choosing a submarket across Dallas–Fort Worth

The metro is large enough that the same budget buys very different space in different submarkets, and each has its own character. Uptown and the central Dallas business districts carry a different image and price than suburban office parks, and the growth corridors to the north, including Collin County where my office is, attract companies that want newer buildings closer to where many employees live.

Rather than starting with a favorite area, map where your staff live, where your customers are, and where your suppliers or job sites sit. Draw realistic drive times at rush hour, not at noon on a Saturday. The submarkets that serve those maps best are your search area, and the rest of the market can be set aside.

Red flags I look for on a tour

Tours are sales events, so I keep a checklist. None of these items automatically rules a space out, but each one needs an answer before you sign.

• Water stains on ceiling tiles or around windows, which can mean roof or envelope problems
• Aging rooftop heating and cooling units with no clear answer on who replaces them
• Several vacant suites in a multi-tenant building with no explanation
• A previous use very different from yours, which can trigger new occupancy requirements
• Parking that looks fine at the tour hour but fills up at peak times
• Vague answers about operating expenses or unwillingness to share past actuals
• A landlord who is reluctant to put promised repairs or improvements in writing

Narrowing the list to two finalists

Once a handful of spaces pass the operating profile, compare them on total cost over the term, converted to a monthly figure. My guide on what commercial space really costs beyond the quoted rate shows how to build that comparison. If none of the conventional options fit your timing or size, it may be worth reading about subleases, direct leases and coworking as alternatives.

Then ask for proposals from the two strongest options at the same time. Landlords respond differently when they know you have a real alternative, and the competition improves both offers. When I represent a tenant, this is the stage where I spend the most effort, because the right space at the wrong terms is still the wrong decision.

Finally, picture the business three years from now in each space. If the answer is that you would already be cramped, or rattling around in rooms you do not need, keep looking. The best choice is the one you will still be glad you made when the lease is halfway through.

Questions people ask me