Skip to main content

Property Cost and Benefit Matrix

What should you consider if you are looking for new office accommodation? You probably know how much space you need, at least roughly, based on the number of staff who will be based in the office, desk share policies, densities and other facilities you need.

You have probably also assessed, to a greater or lesser extent, the ideal location for your new property and the style and quality. All of these factors help narrow down the search, but it is still likely that a search will result in up to ten properties on your shortlist, that can be reduced to three or five serious contenders.

At the start of the search process, there may not be exactly the right property available, with each property having individual advantages and disadvantages. A good way (although not totally scientific) of setting one over the rest is to score the properties on a set of criteria. You chose the criteria and the weighting methods (say score each out of 10, or for more important criteria allow a maximum of 15 or 20 points), depending on the factors that are important, but for example the criteria could be:

  • Location
  • Size
  • Cost 
  • Image / Qualitiy 
  • Amenities 
  • Parking / Transport Links

This will give a matrix that can help order each property on the shortlist. However the process is capable of manipulation, both by the maximum score possible for each category and the way each property is rated. What it does tend to show is the most popular property when assessed honestly by a committee (even a committee of one or two!)

A cost analysis can provide a more scientific comparison, however t is important to assess the specific leas implications such as lease length, break penalties, fit out and dilapidations costs as well as rent and taxes. If each property is available on similar terms for the same lease length this is much easier; if not a Net Present Value comparison should be undertaken for each property / lease commitment that will give you an average annual cost, both in terms of the total commitment and on a pro rata basis.

You may well find that the most favoured property under the matrix analysis does not provide the best value on a pure cost analysis basis, but this could then be the basis of some hard financial negotiations!

Comments

Popular posts from this blog

Studying the Effects of MDIA

There was a first law enacted in July 2008 before the Mortgage Disclosure Improvement Act or MDIA was created. The MDIA was a spin off of the first law and it came into effect on July 30, 2009. The Mortgage Disclosure Improvement Act was supposed to take effect not in July 2009 but in October 2009. The early implementation of the said law by the federal government came as a surprise to all professionals such as real estate agents, brokers, banks, lending institutions and borrowers as well. The dictates the closing time span with regards to the home loan. Before this act was implemented, the normal process of applying for a loan starts out when the commercial bank or other lending firms gives out a good faith estimate or a truth in lending to the borrower. This process is done after the borrower has filled up the standard application form. The good faith estimate only takes about three working days to be sent out by the bank to the borrower. The new law, MDIA, on the other hand, cancels...

mexican realestate prokers

Many real estate investors burnt their fingers in the U.S. subprime crisis. While few economists do believe that U.S. property market is on its way to recovery, no one is really waiting with bated breath. The fact is that people are too wary of investing in U.S. real estate any time soon. The property prices will not rise for a considerable amount of time which eliminates it from the list of investment options for an American. So what are options for a U.S. citizen who wants to secure and grow his investment? The answer lies just south of the border. Mexico Real Estate too was hit by the real estate bubble but it took proactive steps and remerged from the recession very admirably. This is borne by the fact that Mexico properties industry is posting impressive growth numbers and demand is increasing all the time. The prices though still less then pre-recession time are rising steadily. This means that anybody buying Real Estate in Mexico right now stands a better chance of great return ...

niru realestate Mortgage Brokers

• Know the service costs: When you are consulting a broker, it is essential to know the amount that he will charge as fees. There might some hidden charges that you are not aware of. So make sure that you discuss all the details with him before you conduct a transaction. • Read the documents carefully: After consulting a broker you have to sign a contract. Make sure that you read the contract carefully. Sometimes there are a lot of clauses that are included as fine prints. You should know exactly what you are getting into. Never rely on any verbal commitment; it is always important to sign the written documents as they are the proof of the agreement between you and the consultant. Know and understand all the important details of the loan package which the broker is going to give you. Don't sign blindly without being in possession of all the facts. • Know about the right type of loan: Mortgage brokers get their payment via commissions. Make sure that you are going to choose a loa...