Surviving the chaos of moving your office: selecting the right real estate advisor in Tokyo can help you navigate the complex and often overwhelming office relocation process

Relocation is a fact of life for companies. They outgrow their premises, downsize, or reorganize, or landlords sell the building. The prospect of relocation frequently instills panic and fear, for a poorly planned move can doom a company. Too often tenants are seduced by landlords, developers or their representatives, whose knowledge of real estate transactions puts them at an enormous advantage in negotiations.

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The Real Estate Advisor

Senior management at major organizations realize that appointing a real estate professional to help them to devise and execute a real estate negotiation ensures that they are better prepared and informed than the landlord. Such an advisor, with experience in a variety of commercial real estate transactions, is able to execute rent review clauses that work in your company's favor.

A sophisticated real estate advisor should offer more than the traditional real estate brokerage service of bringing together landlord and tenant. Creative problem solving and transaction structuring as well as sophisticated analytical capabilities are the strengths a real estate advisor should possess to identify and align real estate requirements with your strategic business, financial and operational objectives. Drawing on knowledge built on the experiences of their property professionals, they offer local market knowledge, industry-specific expertise and execution of the best possible real estate strategies for your business.

A holistic view towards real estate is vital. Occupancy costs need to be viewed as part of your company's overall operational platform. Combining tenant representation services with project management services enables you to appoint a single full service real estate service provider, who is able to steer you through the acquisition process, from inception to completion.

Your advisor should provide a range of services to assist you in optimizing your real estate portfolio and developing workplace solutions that maximize staff productivity and cost control. He or she should be able to offer an integrated approach to office relocation and manage the whole project, from the space planning and budgeting to the selection of interior designers, the coordination of the tendering process, and the management of vendor bids. Management of bids will ensure that the project arrives on time and on budget.

Do you Have a Valid Reason to Move?

Make sure you have a valid reason to move. Moving is a major decision, so it has to be for the right reason and preferably undertaken by a company in robust health. To think that relocation might be a cure for inefficiency, or mismanagement, is a common but faint hope. A move does not necessarily make problems go away--so it is better to consider whether to stay put and try to address any major issues that you may have been using the relocation project to avoid.

The Master Plan

Top real estate consultants work with their clients to 'master plan' their current and future real estate needs. One important lesson learnt from our experience with various corporate occupiers is the need to build in flexibility.

The increasingly competitive business environment has driven many companies to reassess their real estate cost base. Many firms have explored new 'workspace solutions' to provide teams with a more effective and efficient use of space, translating into significant cost savings.

A master plan study helps major occupiers to achieve a clear audited process, due diligence of all feasible options, mutually agreed project scope and methodology, process-driven, informed decision making and early anticipation of occupancy strategies.

Clients who are prepared to invest time in undertaking such thorough evaluations are able to reduce the costs involved in both one-off projects and ongoing internal churn, reduce project cycle time, improve business group adjacencies, identify new workplace solutions, create operational efficiencies, generate spatial savings and increase end-user satisfaction.

Choosing the New Location

You should carefully choose your new location for many reasons. If, for example, you are based in Tokyo, you will find that many of your staff commute from Kanagawa, Chiba, Saitama or west Tokyo. Many may have chosen their homes for the ease of the commute to the office--so a move across town may inconvenience them.

Questions you should ask yourself:

* Where are your clients located?

* How often do they visit your office?

* Where do your sales people travel to most often?

* Must the entire operation be located at the same prime address, or could you reduce costs by locating your back office in a cheaper location?

* What message do you want your location to convey to your clients, employees, business partners and suppliers/vendors?

* What kinds of buildings do your clients and competitors occupy and how much do they pay in rent?

* What are your technical requirements?

* What issues are there in terms of the property's image?

* What kind of floor plate layout would be optimum for your business's productivity?

* What kind of power and air conditioning requirements does your office environment have?

* What measures would be adequate for security, back-up power and safety?

You real estate advisor should be able to answer all of these questions and more.

Make sure staff are kept aware of developments. Decide what is confidential and who needs to know the details. Being up front may help quell any panic amongst the staff. However, informing the staff of details should be weighed against the negotiation leverage lost by early disclosure of your impending relocation.

Make sure the new premises are right for you. Don't only consider your immediate needs. If you have outgrown your premises, make certain you anticipate future growth as well, and look into flexible options, such as subleasing, expansion rights, and right of first refusal--the right to be the first to lease any space that becomes available on your floor or elsewhere in the building.

Ideally you should be able to select your premises from the inside out--with due consideration to office workstations, necessary equipment and resources, meeting rooms or workshops, disabled access if applicable, etc.

An Opportunity to Make Changes

Take the opportunity to make changes. Ask yourself some basic questions. Are you getting the best available service from all your existing providers? Will they even be available after you relocate? Moving is an opportunity for them to improve their service to you--or for you to chance a change in providers. It is an ideal time for renegotiating services, changing suppliers and bringing a broom to areas of the company not normally scrutinized.

An office relocation is often an ideal opportunity to reconfigure your workplace in order to get a higher return on investment in your office space by maximizing the synergy, efficiency and productivity of your workers. Do your sales staffs need large desks if they are out of the office most of the time? What departments should be adjacent to each other? What are your meeting room usage patterns? How can you reduce the space used for hard-copy document storage?

All this means further work though, and at the time you least need it; so make as much advanced preparation as possible. The rewards can include freeing up resources, improving efficiency and profits and reinvigorating the company. Don't wait until you are bursting at the seams and sitting on top of each other to start the process. Ideally, you should start preparing for your office relocation at least twelve months before you want to be sitting in the new space.

Double-check everything. The key is getting everything underway well in advance and in the hands of professionals as far as possible. Try not to leave things to luck. Luck will likely run out. Don't count on it.

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RELATED ARTICLE: SHIN-MARUNOUCHI BUILDING

Mitsubishi Estate owns and manages 30 buildings in the Marunouchi area, centered on Tokyo Station, and has been striving to create an environment that will attract major office tenants. As the buildings reach the end of their life-cycles, they are being sequentially torn down and rebuilt. The newest addition will be the 38-story Shin-Marunouchi Building, scheduled for completion in 2007.

Like all the new projects in the Marunouchi area in central Tokyo, the Shin-Marunouchi Building should be a success. Even before construction began, the building, to be situated in front of Tokyo Station, the hub of the Bullet Train network, had pricked blue-chip companies' interest.

The Marunouchi Building (2002) portends success for what will be its non-identical twin across the street--non-identical because the Marunouchi Building balances traditional influences and modern design, whereas the new building will be much more modern. The Marunouchi Building is connected by an underground corridor to Tokyo Station. Thus not only metro area commuters but also rail passengers from around Japan patronize the several floors of retail in basement levels and the upper-story restaurants, packed every day of the week. The station connection should also channel patrons to the Shin-Marunouchi Building. The Marunouchi Building has been fully occupied with excellent organizations well known internationally, and the Shin-Marunouchi Building, which will be built to even higher specifications, will attract a similar caliber of tenant.

Flanking the road running along the west side of Tokyo Station toward the Imperial Palace, the two buildings will resemble giant gateposts or koma-inu, the guardian dogs at the entrance to a Japanese shrine.--D.R.

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Dylan Robertson

CB Richard Ellis (Japan) K.K.

Tel. +81-3-6230-1141

[email protected]

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