Fifty-three percent of workers say they can’t find the type of working space they need. It’s an alarming statistic, given the massive impact of a work environment on employee engagement and productivity.
The fact is your office space is a make-or-break factor. Finding the right office space in the ideal location does not only boost staff morale but also increases your visibility and foot traffic.
Now, if you’ve already seen a suitable property, the next critical step is to negotiate your office lease. But setting up a favorable office space lease is easier said than done. Often, entrepreneurs end up with poor lease agreements that drain them financially, even if they’re hitting their sales targets.
In this comprehensive guide, we give you seven surefire tips for leasing office space like a pro.
Table of Contents
Identify Leverage
Whether you’re looking for office space in a tenant’s market or a landlord’s market, you can always find something you can use for leverage.
One way to create leverage is by ensuring time is on your side. That means you need to start looking for business lease options way before you need to move into the new office space. If you wait till the last minute to start negotiations, the lack of time could decide the lease terms, often to your disadvantage.
Avoid revealing your feelings about the office space you’re eyeing, particularly to the landlord or leasing broker. If it becomes clear to everyone that you simply must have the office space, you’ve given the landlord or listing broker some leverage.
Be sure to have solid backup options. One of the most powerful aspects of successful negotiations is being ready to walk away.
Consider the Office Lease Term More than the Rates
Many times, entrepreneurs looking for office space are caught up in the rental rates. Sure, the office rental rate is an important factor, but the lease term can have a greater impact on company finances.
Don’t just focus on negotiating for a handful of percentage points off the rental rate. Instead, think about what your company truly needs for the future. If you select the wrong term, you could end up spending more money in rent for an office space that doesn’t help you achieve your ultimate business goals.
Do Some Comparison Shopping
Research is the most potent weapon in your arsenal when negotiating for a great office lease. Take the time to find out what’s on offer. Determine the average rental rates for office spaces in the area you’re interested in to avoid being overcharged.
Ensure that you compare apples to apples. Learn the difference between rentable square footage and usable square footage.
Generally, the rentable square footage is lower than the usable square footage as the latter doesn’t include such common areas as elevators, lobbies, bathrooms, and public corridors. The idea is to ensure you’re using the same space measurement method as you compare lease rates in various office spaces.
Having enough information about the current renting rates gives you an upper hand when negotiating your office space lease.
Consider Subleases
You can also score a superb deal for office space from a company that has more office space than they need. Generally, subleases are easier to get. Subleases also tend to be considerably cheaper than master leases.
Another benefit of opting for a sublease is that the space is usually turn-key ready and will usually come with built-in upgrades. Moreover, you can get a shorter lease term, which is ideal if you plan to move on to another office space soon. By subleasing, you may also be able to get access to reception areas, conference rooms, and common areas.
Before subletting, be sure to review the master lease carefully, as you’ll be subject to its terms.
Consider Working With a Tenant Broker
One of the smartest things you can do when renting an office is to have an experienced tenant broker on your side. Landlords can be difficult to deal with when negotiating a lease. Many will make unreasonable demands or requests.
A competent tenant broker does all it takes to represent your best interests when it comes to leasing negotiations. They provide all the information you need about the current market and help you locate the ideal office space for your business.
The best brokers, such as austinofficespace.com, will also arrange tours of the available spaces, so it’s easier for you to choose what appeals to you most. They can draft offer letters and expertly negotiate with landlords on your behalf. If you’re going to need other experts to get the space ready for you to move in, such as architects, general contractors, and equipment vendors, your broker may help you get in touch with them.
Negotiate Protection for an Exit
Even with the best-laid plans, things may not go as planned in your business. That’s why you need to think as far ahead as possible before signing the lease agreement.
If you feel that you have good visibility for the next three years instead of five, it’s prudent to bargain for cancelation clauses. The idea is to ensure that if things don’t work out as planned, you can walk away from the lease with minimal harm.
Negotiating a Great Office Lease Shouldn’t Be a Hassle
For many entrepreneurs, negotiating an office lease can seem like a dreadful ordeal. The truth, however, is that you can take the pain out of the process and end up with a superb lease agreement on the office space of your dreams. Finding leverage, picking the right lease term, doing thorough comparison shopping, and working with a professional are just some of the ways to do so.
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