Leasing an office space can an energizing time for your business. But it can also be a stressful experience. An effective office centers on minimizing waste and maximizing productivity. If you don’t have the awareness or knowledge of what you are looking for, you can end up with a bad contract and lots of hurdles. Here are a few tips on what to look for when renting an office space.
1. Plan your budget. Before you start planning your office space or even think of leasing an office space, you should plan your budget. You will need to determine how far your business will grow and how much to spend. Make these decisions carefully so that your business can grow and function comfortably. You should look around at various properties before settling on one. When you have settled on the one you like, it will be wise to inspect other similar properties and compare them. This will help you to understand the general state of affairs and avoid paying costly rents.
There are three common ways in which the landlord’s structure prices for their properties. The first is the Triple Net rate, where the tenant pays a low rent but also pays for all additional costs such as common area maintenance charges, property insurance, etc. independently. The rent here is affordable but the many additional expenses that the business has to bear are neither time nor cost efficient. The second is Gross rate, where all costs including operating and additional expenses are included in the monthly rent. The lease rate here is higher but without the constant headache of miscellaneous payments. Many landlords also opt for a midpoint between these two categories, which is the Modified Gross rate. Here, most maintenance charges are included in the monthly rent. The tenant only has to absorb utility costs such as gas and electric.
2. Look for an experienced broker. It is essential to find a broker who is familiar with the layout and experienced in the commercial real estate. Seek the assistance of brokers who are acquainted with the properties in the area. You should also look for a broker who isn’t biased towards the landlord. You can do this by searching online communities for reviews of various brokers and by asking around about them.
3. Choose a suitable location. This is probably one of the most significant parts of your leasing process. Choosing an appropriate location is extremely important since the office needs to be accessible to employees, vendors, and clients. Therefore, you should choose a location that is close enough for your team to travel to, can be accessed via roads and public transportation and is near other commercial centers that are important to your business.
4. Find the right space. Now that you have decided your budget and location, you must settle upon a suitable space. First, you should determine the how much space you would need. This will take some effective decision-making skills. If you lease a larger office that is required, not only will you waste valuable space but also lose valuable resources such as money. You should always constitute future growth in your plans but do so cautiously. Examine the area carefully and understand whether parts such as hallways, lobbies, and bathroom are included your rental space. Discuss with your landlord which areas will be permitted for use and if the cost of these will be included in the rent.
5. Pay attention to your lease. One of the most common mistakes tenants make is not taking the time to read and understand their lease. Any and all issues that arise during the leasing period will lead back to this legal document. It is therefore wise to go over the lease thoroughly and ask for expert legal advice on the matter. When reviewing the lease you should look out for the usable areas vs. the rentable areas. The usable square footage does not include the use of lobbies and bathrooms and you might end up paying extra for these functions. When leasing an office space, you should keep the expansion of your business in mind without committing to too long a contract. You should keep a provision for an early exit in the lease and be aware of any fees and penalties levied in such a case.
6. Look out for additional costs. Investigate whether costs such common area maintenance charges, property taxes, insurance and operating charges are included in the lease and be watchful of costs that extend beyond the area you have leased. Don’t be afraid to clarify these points with the landlord and ask for help in understanding the terms of the lease.
7. Discuss tenant improvements. Tenant improvements or TI is a source of great displeasure for tenants and landlords. Tenants usually like to make adjustments and improvements to the leased space. Landlords usually do allow tenant improvements in case of longer leases. The terms of such changes should be clarified and the parties should come to an agreement. The ownership of such modifications should be also be explained in the lease. Watch out for clauses that require you to return the property to its original condition. Discuss with the landlord and set a clear plan regarding the costs and responsibilities of wear and tear of the office space.
8. Allow for parking spaces. One of the most overlooked aspects when leasing an office space is the number of parking spots. A shortage of parking spaces can result in a longer commute for your employees where they spend valuable time looking for a place to park. You can take a survey in your office to identify how many parking spaces you will need. Keep shuttle buses and cabs as well as your clients’ needs in mind when looking for space and consider leasing buildings with such availability.
Please comment below and let us know if you found these suggestions helpful. Do email us at www.desqworx.com if you have any queries.