Situation:  A company signed a 3-year lease a year ago, assuming that this would accommodate their needs. Growth has been much more rapid than anticipated, and they’ve outgrown the space. Should the company expand or move now and run the risk of over-purchasing new space, or should they wait until actual growth requirements are more apparent?

Advice from the CEOs:

• The answer depends on the risk that you are willing to take as a company. When you signed your lease you took a risk based on your expected 3 year needs. The current situation is no different. Analyze your current growth trajectory and take a comfortable level of risk.
• Options will vary depending on whether the move is relatively high or low cost, and what space configuration you need.
  • Determine whether you have a high or low cost to expand or move – equipment, communications, wiring, etc.
  • If your costs to reconfigure space and move equipment are low, then the risk is relatively low beyond your new lease obligations.
• Talk to your landlord.
  • With the amount of space currently available in Silicon Valley and the Peninsula, your landlord may have alternatives that are attractive to you.
  • Look for a solution that allows you the space you need under a comfortable risk scenario, but which also gives you options to expand into adjoining space as need arises.
• Also talk to a broker about what kinds of space are available at what rates, and what incentives may also be available.
• Short-term, consider leasing excess space from your neighbors as you consider alternatives.

Key Words: Office, Space, Lease, Growth, Risk, Cost, Landlord, Broker

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