Commentary: How to find cheap office space (74921)

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I was shocked when I learned from attorney Bradden C. Backer that office space in downtown Milwaukee has a vacancy rate of about 20 percent.

Yes, the economy’s that bad. The good news is that it’s a renter’s market when it comes to finding affordable, appealing office space.

Milwaukee attorney Joseph Seifert recently took advantage of that fact to find an amazing deal.

Seifert opened his own practice after passing the bar exam this past spring. Like most new attorneys, he did not have a lot of capital for start-up.

So, he started by looking for space to sublet from other attorneys, as well as looking for his own space to lease.

In the former category, the cheapest rent he found was $550 per month for an unfurnished office.

In the latter category, he soon discovered that some landlords apparently hadn’t heard the economy has tanked — or were hoping he wasn’t aware of that fact. For example, space in one building in the Third Ward cost $21 per square foot, plus utilities and parking, with a five-year lease.

Seifert took his time, and instead found a much better solution: renting space in the Century Building on Wells Street. It’s centrally located, there’s parking nearby and it’s walking distance to both courthouses.

It’s a beautiful, historic building. But the offices are old and most need face-lifts, he says.

Seifert opted for a 1,650-square foot space, at $6 per square foot, including all utilities, for a one-year term with a five-year option.

The space needed to be built-out, but the bulk of the work was cosmetic. If he’d chosen a space that needed walls torn down and the like, he suspects he could’ve negotiated an even sweeter deal, but he just wasn’t up for that. Although, if you are, Seifert suspects you can find contractors eager to work at cost-conscious rates.

It’s a win-win. Seifert got bargain office space, and the landlord benefits from him modernizing the space, should he ever leave. Which is not likely, given how excited Seifert is about his office.

Some people enjoy home improvements. Seifert isn’t one of them, but luckily for him, his brother-in-law is. He put down about $200 worth of new carpeting, painted and re-lacquered the woodwork. Voila!

The space includes a reception area, a conference room, two storage rooms, a kitchen and four individual offices. Seifert furnished the entire space, tastefully and inexpensively, by hitting a going-out-of business sale.

He’s now looking for attorneys/subletters, for around $350 per month, and perhaps they’ll split the costs of wireless Internet, legal research, etc.

All told, he spent less than $1,000 on updating the space, which he’ll amortize on his tax returns. And he’s received tons of compliments from clients on how nice it looks.

The subletting option

Now, back to Backer, a Milwaukeean who recently started Albrecht Backer Labor & Employment Law SC.

An established lawyer, Backer says he used the grapevine to find attorneys interested in subletting. Two colleagues from a previous firm offered him space at their firm, Wille, Gregory & Lundeen LLP, on Michigan Street.

Backer considered working from his home — he does meet with clients there when it’s convenient for them — but ultimately decided, “I just think a regular office is essential to send a message of credibility for my client base, which is principally employers, many of whom have known me for a long time.” More importantly, he says, “It enriches my day to be with other people.”

The arrangement is month-to-month. Backer pays a flat rate that includes utilities. The space has two conference rooms and library materials; Backer just pays for phone and Internet. There’s room for his firm to grow, too — another factor that led him to go with this particular space.

Initially, Backer and the other attorneys planned that he would share the cost of the administrative staff. But two months into their agreement, he’s found he isn’t using their services, so he’s getting a rebate and a rent reduction going forward.

That’s an example of the flexibility that comes with subletting from colleagues, he says. It stems from that long-term relationship, and also from the negotiation style he took when striking the deal.

“It’s very important not to take a hard stance. I view this more as a marriage than a business transaction, because everyone has to be happy with the situation.

“My approach was simply, ‘Here’s what I’m looking for, you tell me what you think is fair, and I’ll let you know yes or no, among all the options I’m considering.’ The way to handle these negotiations is really not to treat them like negotiations at all.”

That’s what Benjamin J. Peirce, of Peirce Law Offices, did, too.

The plural aspect of the firm’s name is intentional; he uses office space as needed as a subletter in two locations, Milwaukee and Hartland.

In Milwaukee, his office is next door to a law school friend, Yeng Kong Lee, of Legal Recourse LLC. In Hartland, a former babysitter and longtime family friend is his landlord. Part of Peirce’s payment to Lee will come in the form of future referrals.

Final advice

Start your search for office space by going to Craig’s List, says Seifert. Landlords or attorneys looking for subletters who advertise using paid classifieds will pass that cost on to you. (Except those who advertise in the Wisconsin Law Journal, of course!)

Seifert also suggests getting the word out that you’re looking. Many small firms have space and are looking for ways to cut their overhead.