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CITY vs. SUBURB,
WHERE TO LOCATE YOUR LAW OFFICE?

- Part II -
By Levi F. Smith, Esq.

As Published in Michigan Lawyers Weekly
November 11, 2002

Continued from Part I

Future Area Growth – SEMCOG - The Southeast Michigan Council of Governments has done a projection for 30 years out for population and employment growth by city and township in the six county metro Detroit area. If you plan to be at your location (new or current) in 7 years, you need to know the population and economic trends. Where are your clients and prospective clients now? Where will they be in 7 years? A client doesn't care if you can walk to the courthouse. Will you be easily accessible to clients and staff in 5 years? While clients do not necessarily select you because you are close by, convenience is definitely a factor that they will consider. Most lawyers in metro Detroit today are located in Southfield because it is centrally located to business and the general population by virtue of the freeway system and the abundance of all types of office space. Future growth trends in all directions from Detroit insure that Southfield is well located for the foreseeable future.

The Building - After determining the general location, you must consider the buildings and available space. Is it the place that you want to spend most of your working hours? Does the HVAC (heating, ventilating, and air conditioning) work? Talk to other tenants to see if they are satisfied. Are the elevators well maintained? Is there theft from janitorial crews or outsiders due to lax security? What particular space is available for you? What are the views? Is there value in the current buildout? Total demolition and rebuilding is expensive and the tenant will usually pay for it one way or another. Will you be able to grow or do all your neighbors have long-term leases with options and no relocation clauses?

Does the building have adequate loading facilities to make it convenient for attorneys to take file boxes home or is the building surrounded by no parking, no standing signs and eager meter maids with ticket books in hand?

The cheapest building is not necessarily the best building, all the other factors being considered. You need to do a space plan with your architect so that landlords give you proposals that reflect your buildout requirements, not squeeze into a landlord’s vacancy.

What is the vacancy rate? If it is too low, there might be a foreclosure, which means that necessary maintenance and capital improvements may not get done. Defective elevators may not be replaced. Heat and air conditioning may not be comfortable. Janitorial service may be reduced. You do not want to think about constructive eviction for the first time since you took the bar exam. Remember the courts always favor the commercial landlord!

Older buildings may be functionally obsolete because they do not have enough electrical power for your computer system to work efficiently. It is expensive to add power to a building. Will the landlord and its electrician guarantee that you will have the watts per square foot that you require to operate effectively?

High-speed Internet access is essential for most firms today. Rapid data transfer is an everyday need. Before falling in love with a building, make sure that fiber optic T-I lines or at a minimum, DSL lines are in the building. Leasing agents and building managers are often uninformed on these issues. Providers keep information about access a secret! Call the providers to insure that their lines are in your building and have the capacity for your operation. As a back-up plan, you should maintain modem lines and a dial-up ISP in case the high-speed provider’s system is "temporarily down" or they go bankrupt.

Dress Rehearsal - Visit your prospective buildings during rush hour. How is traffic, timing, accessibility, etc? Go after hours unannounced to check the level of security and ease of access.

Real Estate Brokers - It is advised that you retain an experienced real estate broker who has local market knowledge to be part of your site relocation study. She/he will have building and market information and negotiate the economic terms of the lease. Be careful about conflicts of interest. Will you be steered to buildings where the broker or their firm has an exclusive listing with the landlord? Will the broker be approaching the landlord the day after your lease is signed to get his "for lease" sign in front of the building? Ask the broker whom they represent and get it in writing. Even though the landlord may pay their commission, he/she can represent you with full disclosure to all parties.

Representing Yourself – Remember in law school when you learned “The lawyer who represents himself has a fool for a client”!

Even the most experienced real estate lawyer is not up to date on market conditions. A reputable corporate tenant representative will save you money, aggravation and time to accomplish your goals.

Conclusion - The purpose of this article is not to overwhelm you in terms of factors to consider in a site location study, but they are numerous and must be considered when opening or relocating an office. It is recommended that you use a tenant representative or corporate real estate advocate, to bring objective thinking and research abilities to help you make an informed, reasonable decision. Sophisticated real estate software like Paradyne, ProCal and PlanEase exist and are used for "apple to apple" comparisons on the financial aspects of competing sites including all costs and present value of money. But no software exists to ultimately answer where is the best location for your firm for today and five years from now. This article gives you the checklist you need to weigh the most important factors.

BIO: Levi F. Smith, a native Michigander, lives in West Bloomfield. After passing the bar in Michigan and California and practicing law for 6 years, he entered the commercial real estate field. In 1988 he founded the first corporate real estate firm, Levi F. Smith Real Estate, Inc. in Michigan to exclusively represent tenants and buyers. For more information, visit http://www.michigan-commercial-real-estate-properties.com