The Do's and Don'ts of Moving Your Business

Real estate attorneys' tips on what to look for in a new space

By Andrew Brandt | Last updated on January 27, 2023

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Having to move your company to a larger space in a new location is generally a good problem to have. For some business owners, though, the process of picking a new address can be frustrating. “You need to admit to yourself that [real estate] isn’t your core business; it’s a rare occurrence for a company,” says Andrew Spilkin, a real estate attorney at Bodman in Troy. “It’s critical that you work with a team that’s skilled in doing this on a day-to-day basis: legal counsel, brokerage team, contractors, architects, relocation experts, a lender, and even your insurance agent.” One of the first decisions is whether to lease or purchase your new office space. Douglas E. Kelin, a real estate attorney at Honigman Miller Schwartz and Cohn in Detroit, says businesses that simply require office space often don’t need to own the new property. “Especially if you don’t want to incur more risk, you might be more inclined to lease,” he says. Kelin recommends scouting locations and knowing some basic figures before you hire a broker. “They’re going to ask you what you want to pay per square foot, how much you can afford, and what kind of building you want,” he says. You should also consider the impact each potential location may have on your customers and employees, Spilkin says. A great spot on the other side of town probably isn’t worth it if half your employees leave. Spilkin further suggests not settling early. “It’s best to have multiple parties bidding against themselves to get your business—or to at least have a fallback if option A doesn’t work,” he says. Equally important is making sure the price is right. In addition to the lease, potential expenses include hiring a moving company, legal and brokerage services, and, if you need to renovate, contractor services. Moves into Detroit require further considerations. “Making sure that your employees have sufficient access to parking, and that it’s safe, well-lit, and close is always a challenge in the city,” says Kelin. The tax liability may also be higher, as is often the case for those moving in from outside of the city. “Right now, Detroit is so exciting—it’s attractive to be here. But it can be more expensive.” Spilkin notes that you’ll want to have a contractor look at the building, talk with local officials about zoning permits and do some research on the land and landlord. “Sometimes it seems like a great deal, and there’s a reason why,” he says. After you select a location, make sure the agreement is in writing. Do not depend on a handshake deal. “If it’s not in the lease or purchase agreement, you can’t rely upon it. A landlord may live up to their word, but a lot of times it’s a he-said, she-said situation,” says Spilkin. “It’s important to establish a relationship with the party on the other side, and make sure it’s someone you want to do business with. But only trust them so far, and make sure the deal is pen to paper.”

Left Behind

Moving in isn’t the only component of getting a new office; leaving your current property is an equally important step. “If you own the property, you have to decide if you’re going to sell the space or lease it out,” says Daniel M. Share, an attorney at Barris, Sott, Denn & Driker in Detroit. “If it’s leased out, you want to make sure that you have a walkthrough with the landlord before you leave, so that, six months later, they won’t send you a bill saying you didn’t do this, that or the other thing.” You’ll further need to figure out when your current lease will end, as you may not have the right to hold over even one day. “Sometimes you will leave a little early,” Share adds, “and the landlord might be able to [prorate your] rent—and sometimes they’ll insist that you pay.” This is also a good time to figure out how you’d like your next lease to look. Says Share: “It’s not just, ‘How do I leave?’ but, ‘How do I leave so that I maximize my next move?’” For more information on this area, check out our overview of real estate laws.

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