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Negotiating the Best Commercial Office Lease: Financial Analysis

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Business transactions require careful financial analysis and commercial office space leases are no different. Whether your organization is negotiating an office lease for its first facility, relocating into a larger office space, or negotiating a lease renewal for the same facility you’ve rented in the previous lease period, a complete evaluation of the costs should be to reveal exactly how beneficial the current negotiating position is to the future of the company as well as to compare options.

By this point in the commercial office property lease negotiation process, you should have already selected a real estate professional, a tenant rep, to assist you in obtaining the best possible office lease. Property owners, of course, want to realize as much money from their real estate investment as possible while you, as a business owner, want to secure an appropriate venue for your firm at the least possible cost. Experienced OfficeFinders are office space lease negotiators and know exactly how to analyze the cost of occupying the commercial space so that there are no unpleasant surprises in store for you.

You may have found what appears to be the perfect location for your business and, at first look, the lease costs appear to be a fair deal. Comparing the lease cost of the selected office space to the cost of other available properties in the same market area will strengthen your negotiating position and allow you to establish a final lease agreement that is beneficial to your company.

The real estate professional acting as your lease broker will include in the financial analysis each and every cost identified in the lease document as being your responsibility. These will include but may not be limited to:

  • Rent per square foot
  • Useable square feet available
  • Operating expenses charged to the renter
  • Caps on rent or operating expense increases
  • Provisions for reduced rent due to damages or other circumstances
  • Tenant improvement allowances
  • Value of parking
  • Incentives for lease renewal, longer lease term, expanding rented space, or early payment of rent
  • Cost of utilities paid by renter
  • Penalty for early lease termination if necessary
  • Cost of adhering to any applicable county, state and federal regulations
  • Repairs and maintenance required to be paid by renter
  • Common area maintenance, repair, upgrade
  • Charges to renter associated with security and cleaning services defined and selected by the landlord

Computer software applications make accurately calculating and comparing the total cost of rental easy. It does requires trained professionals to understand the complex lease terminology and translate this into accurate dollars and cents to be able to use in making your office space decision. If any areas requiring further negotiation are identified as a result of the financial analysis, you will be prepared with documented reasons for requests in lease changes. The assistance of a commercial office lease broker can save your company thousands of dollars.

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By: James Osgood

Office Relocation , Office Space Negotiations , Tenant Representation

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