Making a bad decision when it comes to choosing office space can have negative repercussions for any business, including loss of customers and a big impact on your bottom line. As many landlords prefer three to five year leases, it’s essential to know what you’re looking for before you lease office space and sign on the dotted line. Find the right office space, make the best decision for your company and start making money.
Use a Tenant Representative to Lease Office Space
Choosing the wrong broker, or not using one at all, can add up to a very expensive error. Tenant representation is essential, but you don’t want to rely on a broker with a conflict of interest, such as one who represents both the tenant and the landlord. Use one who strictly represents you as the tenant, which ensures that the broker remains true to their fiduciary duty. You wouldn’t use an attorney to represent bother parties, and the same holds true when signing an office lease.
As a business’s office space is usually one of its biggest expenses, having the right broker on your side can often help to reduce the company’s bottom line and also help protect its interests in a number of other ways.
Before signing an office lease, have you considered all of the short and long-term priorities of the business? Ideally, you should have an office space planner conduct a space program to determine your size needs including aspects like floor load capacity in order to support heavy equipment. Your tenant rep can help you with finding one and very often it will not cost you anything. Landlords provide this as an incentive to get you into their building. You may also want to find a space to lease within a larger complex that allows for future growth.
Understand Associated Costs
In addition to monthly rent, make sure you understand all costs involved, such as utility costs, common area maintenance fees, Internet and telephone installation costs and possible extra HVAC (heating, ventilation, and air-conditioning) costs for running your business after hours.
Both you and your broker should inspect all documents thoroughly as they are designed to benefit the landlord and make them money, not you.
Take Your Time
Not giving yourself enough time to make the decision and to go through the entire process of securing an office lease is one of the biggest mistakes office tenants make. You need time to explore the market with your tenant rep, tour facilities and interview landlords. Most tenants tend to significantly underestimate the time it takes to complete each stage, whether renewing, moving or starting fresh. Depending on your space needs and how complex your technology, the office leasing process may take 6 to 12 months or longer just to find and negotiate a deal.
Taking these considerations to heart will help you have a positive outcome when you lease office space.
By: James Osgood