Weighing the Pros & Cons of an Office Relocation

Situation
An established Auckland law firm based in leased offices in Auckland’s central business district was reviewing its office space needs and location.

The company occupied five floors in a high rise building on a main inner city street. One of the oldest law firms in Auckland, it was known for its central city location. However, the building had changed ownership and the firm was considering the benefits of relocation to new offices.

The law firm’s partners came to Parallel Directions for advice on whether to stay or go. They wanted clarity on whether moving would be their best option, both financially and for the reputation of the firm. They needed to consider whether the cost of sourcing, leasing and fitting out new office space was preferable to negotiating a new lease agreement with the new owners of their existing offices.

Solution
Parallel Directions applied its Stay-or-Go process. The process involves a detailed examination of the existing commercial property lease and conditions, trends in the market, and the strategic needs of the business.

The 15 equity partners in the law firm were interviewed as to their views both about their location and the future direction of the business.

Parallel Directions consolidated the information and ranked the partners’ preferences, and coupled this with a review of the existing commercial lease agreement’s rental and conditions.

It was recommended that the lawyers stay where they were, as the location best represented the image of their business, rather than a relocation to more expensive new offices. There were opportunities too for renegotiating the lease agreement with the building’s new owners to achieve a better deal.

Outcome
Parallel Directions negotiated a new lease agreement for the law firm that avoided a rent hike that would have been a third more than the existing lease. In return, the building owner was able to have the law firm stay in the offices with continued naming rights and as an anchor tenant with a long-term lease.

The client was happy as it was clear the options had been examined and weighed up in detail and the best option chosen, which would support the company’s reputation and business strategy and stacked up as a good financial option at the same time.