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Whitman Realty 1103 NE 40th Place Suite Bellevue WA PH 425 403 3944 FX 425 403 3945 WhitmanRealty.com Proposed New Commercial Office Lease
Prepared for. Dan Whitman CEO Prepared by. Jess Sloan Broker A new commercial lease space is required in order to expand business capabilities office space and profits by change of location. This will position Whitman Realty to become better branded highly visible realty office in the Bellevue area. Proposal Number. The Objective Expand business capabilities office space and profits by change of location. Need #1. Office space for on site agents conference rooms work rooms and lobby. Need #2. Easily accessible location with parking.
Need #3. year lease with options to ensure expansion capabilities. The Opportunity To become better branded highly visible realty office in the Bellevue area. Goal #1. To move into new commercial lease space by October 1st. Goal #2. To increase client base by improving visibility and access. Goal #3. To expand the business by 25% by year and by 50% by year 5. The Solution
A new commercial lease space is required in order to expand. Recommendation #1. Examine office space at 114th Ave SE Bellevue. Recommendation #2. Respond to initial lease option by July 31st. Recommendation #3. Complete lease negotiation and signing by August 15th. The opportunities created by move to the proposed commercial lease space allow Whitman Realty to move in forward direction and to become highly competitive with the more well known realty franchises in the area. Opportunity #1 Increase Visibility The new location will increase company branding as thousands of commuters traveling on Southbound 405 can see the office building and its signs from the freeway. Opportunity #2 Increase Sales With more office space we can hire new agents. This coupled with higher visibility will lead to more sales and therefore higher profits. Even at low average of four sales per year per agent for low to average price home $350 000.00 this results in commission profit of $504 000.00 per year for Whitman Realty. In addition we can expect that our existing agents who have had sold combined average of homes per year could easily increase their combined average to homes per year at further profit increase of $252 000.00. The latter profit substantiates the majority of expenses incurred in the moving of offices. Opportunity #3 Increase Future Expansion Capabilities Higher visibility coupled with higher sales allows the company to consider and afford opening new offices in different locations or taking over other leases in the same proposed lease location after an initial period of three years. Detailed below is the Return on Investment ROI analysis for the project. The costs for the lease increased advertising and new office equipment and supplies vs. the benefits are summarized for 5 year period for average slow and growth markets. The difference in the markets assumes profit differentials of $244 000.00.
Average Market Description Total Total Costs 2 000 Benefits 3 000 1 000 Ratio Slow Market
Description Total Total Costs 2 000 Benefits 2 000
Ratio Growth Market Description Total Total Costs 2 000 Benefits 1 000 1 000
1 000 1 000 1 000 5 000 2 000 Ratio Financial ROI Benefits.
Although costs for the lease are significantly higher than at our current location the hiring of additional realtors and increased sales yields conservative estimate of over 100% return for years – 5. Even if the market slows which is less likely in Bellevue than in other areas of the state prices are not forecast to drop and ROI of even 40% for years would justify the move. Non Financial ROI Benefits. Less traffic easier building access higher visibility greater job satisfaction and increased income for agents and greater agent diversity. Jess Sloan has performed thorough business location analysis for the newly proposed commercial lease space at Stanfield Business Park. Following are the results. 5260 114th Ave SE Bellevue WA Suites Location. Stanfield Business Park right off 405 close to downtown Bellevue. Stanfield Business Park houses an accounting services company mortgage broker software development business financial planning business and the main offices for life insurance company. Security. Each business has its own entrance and separate facilities within the larger building. Stanfield Business Park offers hour camera surveillance and programmable keypad entries. Given that we desire our clients to gain easy access to our offices during business hours this is more than enough security for our purposes. Infrastructure. The roads surrounding Stanfield Business Park and the outlying area all have been planned for expansion. Stanfield Business Park developers own two adjacent lots with capabilities to expand building space. While we don’t currently need more space than the proposed lease allows these future lease options could be an asset if our business continues to expand beyond the next five years.
Access. Visible from 405 with easy access using the SE 8th Street exit or the 112th Street exit off Bellevue Way. Traffic is much less congested in this location that in our current downtown locale and parking is more widely available. Parking is free for clients with handicap access at all entries to the building. While our lease would come standard with parking spaces parking with up to spaces can be negotiated yearly. While the proposed lease space is outside the immediate downtown district the new location will be easier to access easier to find and easier to park at than our current location resulting in higher targeted traffic. Competition. Windermere has offices at SE 36th Prudential has offices at NE 2nd; Coldwell Banker has offices at Bellevue Way SE. These are the closest competing Realty offices. While we are not as well known as these franchises the proposed lease would give us visibility from 405 which none of the other offices can boast. Marketing. The location itself is marketing tool and with large sign on the east side of the building visible to 405 Southbound traffic we could achieve thousands of views of our logo per day. Increased visibility would directly increase our company branding and lead to increased sales. In addition our offices would be one floor above popular mortgage brokerage company allowing our clients to handle financing in the same building. The following is discussion of how the project will impact Whitman Realty's operations and the proposed solutions for minimizing problems. Advertising All agents will be required to change websites fliers newsletters and associated marketing materials to reflect the change of address. The change in location will cause confusion for clients and changes to phone numbers faxes etc could result in lost sales. Whitman Realty needs to offer each agent an advertising allowance to offset their costs in updating all their sales materials. The company also needs to have the Whitman Realty signs in place on both the eastside of the building at the street and at the building entrance at the time of the move as well as change of location signs at the old location. Office Accessibility Agents will lack access to their personal offices and company office equipment immediately preceding and during the move. Agents who sub lease space in our current location will be asked to move their computers and personal effects the week prior to the move. They will be asked to work from home for the two week period of the move. Agents who are prepared for this should be able to arrange schedules and meetings with clients to accommodate the move and can plan to have marketing materials done ahead of time or printed at alternate locations. Computer Accessibility We will need to start disassembling the computer network one week prior to the move and we will not have access to on site computers until they are re networked in the new offices. Our technology support company will arrange alternate server storage and access during the move to minimize the impact. Agents will still be able to access the server and Northwest MLS from home. TO. Dan Whitman
FROM. Jess Sloan RE. Proposed Commercial Lease DATE. July Dear Dan As you are well aware I’ve been scouting locations for the possibility of moving Whitman Realty to more visible location with more offices. As an assistant Broker who has worked with you now for seven years I’ve witnessed the growth of the business as well as its potential and believe the time has come where we must make bold move in this case literal one or we face being squeezed out of the market by more visible highly branded franchises. I understand that the moving of your offices is serious undertaking one that you have been pondering for the last year. also understand the risks and the expenses involved and given the potential slowing of the market your hesitancy to make any major changes. However think you will be excited about the new commercial lease am proposing. Not only will this move allow you to expand the business the company branding and the possibility of franchising but it will also advance the careers of the realtors working for you as well as allow you to hire new recruits resulting in higher commissions and higher profits. As per our conversation last week took the liberty of optioning the lease for your review. We have until midnight on the 31st to respond. look forward to talking with you further about making this expansion an actuality. Sincerely