Choosing the right office space rental for your business or organization means more than just choosing a physical location. If you have customers visiting your property, then you want to make a good impression. You want to make sure it is somewhere that you employees will be happy and productive. Depending on your organization’s identity, you might need to appear trendy, modern, or traditional, and your physical location can help customers decide if you are the right place for them to take their business or not. When choosing commercial real estate, the following tips are a few considerations that can help you find the location that is just right for you and your company.
Appearances are important. Take a very close look at the property, standing in the parking lot, or on the sidewalk in front of the building. If the building looks dingy and dirty to you, it will probably look that way to your customers and employees as well. Unless you do not get any customer visits, make sure the location is somewhere that you would visit as a customer. Don’t forget your employees. Is this somewhere your employees would be proud to work?
Consider accessibility and convenience. Many customers will simply not visit your location if it is difficult for them to park, maneuver a wheelchair through, or find the elevator or stairs. While some inexpensive improvements may be feasible and advantageous, you do not want to invest more money into making your building accessible than you spend on the property itself. Make sure the elevators and stairs are in good condition, ensure that the location is handicap accessible, and consider the ease of entering and exiting the parking garage or lot for your customers.
Check with the local City Hall to ensure that the property is zoned for your business. If you have an unusual business, rezoning can take months or even years, and is a costly process that requires legal consultation and assistance. Checking out the zoning ordinances for the property before you sign the contract is always the easiest way to avoid headaches and extra cost.
Current and Future Space Needs. Taking into account what your future ofice space rental needs may be is very important when signing a multi year lease that will lock you into a defined area. Whether you are a large or small company the basic needs are the same. You need to consider your office space efficiency, cost effectiveness, room for expansion, and strength of location. If your company is currently housed in an inefficient space the multi-step processes necessary to keep everyone ‘in the loop’ can create redundancy and confusion. While a move can be costly, if done correctly it can reduce future costs significantly. Would moving from your current location disrupt client service? Or are you able to make a move without affecting the product or service you provide? Lots of questions to be answered before deciding to make a move.
Before Signing an Agreement for an Office Space Rental for Lease
Renting office space can be exciting and overwhelming all at the same time. In some of those anxious moments, it can easy to get caught up in all the excitement and sign a lease agreement that has unfavorable terms. Since the success of your business largely depends on the right rental terms, you’ll want to check out a few important details whenever you are considering an office space rental.
The type of lease that’s being offered can make or break your business, as some could result in your paying large additional charges you weren’t prepared for. The common types of office leases are:
- Net lease that includes base rent and a nominal charge for taxes and insurance
- Double net lease that requires you to pay rent in addition to the entire cost of taxes and insurance
- Triple net lease which mandates that you pay rent, taxes, insurance and maintenance fees
- Fully serviced lease or gross lease in which the landlord pays for additional expenses and then passes them on as a “load factor and increased from a base year.”
When choosing a fully serviced lease, it’s important to understand what the load factor and base year means. It is essentially a way to calculate the total monthly rent when a tenant has usable square footage in addition to common areas. For example, a business could occupy space in a building where stairways, restrooms and entryways are common space. In this instance, the load factor covers the expense associated with maintaining these areas, spreading them evenly among all who use them. The base year is the year in which you must pay for any excess expenses over the amount for that lease year. You have to be careful that the base year is current or in the future when signing a lease.
Although you may be offered a deal for signing an extended office space rental or lease, if you’re a startup or growing business, you should be leery about doing so. That’s because you just might find the needs of your business change a great deal over the first couple of years. For this reason, you should consider a short-term lease that’s between one and two years if you are a brand new company.
It’s also a good idea to ask about initial improvement allowances, remodeling or redecorating when signing a lease. Most long term leases will include a tenant improvement allowance. Make sure you know if that is on a rentable or useable square footage bases. It can make a difference of 15% or more. You may choose to build cubicles, add new carpeting or paint the walls once you settle in, so you need to know if this is something that’s allowed. Many times, minor modifications are allowed as long as the structural integrity of the building is not altered in any way.
Consult an expert. The perfect office space rental can be competitive and hard to find, so consulting an expert is your best bet. An experienced tenant rep can help you locate inspectors, engineers, architects, or anyone else that you may need to get your business off and running in a new improved location. The cost of a tenant rep are paid by the landlord. There is no cost to you for their services, yet they represent you and don’t get paid until you are happy and sign a lease. You have nothing to lose. Just make sure and find an experienced one who will not only help you shortlist potential locations, but negotiate a great deal for you. They understand to nuances of leases and can help you avoid costly mistakes and save you money.