After the need for space has been established, a user needs analysis must be conducted. This process captures vital information such as the user’s physical, geographic, budget, timing, and various subjective requirements. The analysis should differentiate between must-have requirements and wish list items. When combined with the financial analysis these criteria ultimately shape the space acquisition decision.
The information that should be incorporated in a needs analysis includes (but is not limited to) the following:
- Overview of the business
- History, business plans, objectives of the tenant’s/purchaser’s company, etc.
- Space requirements
- Space/square footage is needed?
- Proposed use?
- Contiguous or noncontiguous space? Can employees/departments be on different floors or even different locations?
- How many offices, what sizes, windowed, etc.?
- For industrial users – power, clear height, bay depth, proximity to freeways, railways, etc. requirements?
- Corporate-required standards?
- Open area? How many/what size cubes?
- Length of lease term?
- Space/employee layout?
- Growth/contraction projections?
- Above-standard requirements
- Above building standard improvements, i.e. private bathroom?
- Above building standard finishes, i.e. paint, flooring, etc.?
- Above building standard security, janitorial services, etc.?
- Location
- Market, submarket, trade area, part of town, etc.?
- Location of business owner, employees, customers?
- Building class, type, etc.?
- Building amenities?
- Any state or local incentives?
- For retail users, demographics, traffic counts, zoning?
- Timing
- How quickly does the user need to occupy the space?
- Existing lease expiration date?
- Condition of space – as-is or build out required?
- Flexibility
- Termination right?
- Expansion right?
- Parking
- Required parking ratio?
- Paid vs. Free parking?
- Visitor parking?
- Reserved space?
- Covered vs. uncovered parking?
- Specific parking requirements, i.e. trucks, vans, etc.
- Budget/cost imperatives
- Acquisition budget? Annual/monthly rent budget?
- Financing vs. cash purchase?
- Factors influencing budget
- Deal breakers
- Personal guaranty required?
- Major competitor located in same building/area?