Moving is stressful. It’s not just the logistics of getting your business packed up and moved over to a new office space — it’s the uncertainty of how things will work out once you have moved. Before you sign a commercial lease – whether you’re a first-time commercial tenant, or an established business moving somewhere new – you’ll want to ask some important questions to see if the space is the right fit for you and your business needs.
In this blog post, we will help you feel more prepared for the conversations you’ll have when you’re leasing a new office space.
Lease Pricing and Fees
You probably already have a budget in mind for your new office space (and if you don’t, you should). Your first question should obviously be in regards to monthly and total cost of the new office space. Once you have the basics down and you’re still interested in the space, your next questions should cover what’s included in the fine print of your agreement.
1. What’s included in the rent price?
Make sure you understand exactly what’s included in the rental price. For example: traditional office leases would cover the cost of utilities, but this isn’t always the case when leasing office space today. Make sure you know exactly what you’re paying for and exactly what is included in your monthly rental price.
2. What isn’t included in the rent price?
Are there any additional fees that you will have to pay on a monthly basis that isn’t covered in the office rental price? This question is rather important when it comes to leasing office space, as hidden fees have the potential to add up. Make sure you factor any hidden costs into your budget before you sign on the dotted line.
3. Who is financially responsible for repairs and maintenance to the office space?
While this is usually included in most office lease agreements, you never want to assume when it comes to costs and fees associated with leasing commercial property because each lease is unique. Make sure you know exactly what is and isn’t covered, including asking about any repairs that need to be made to the office space before you move in (and after you’re moved in).
4. Is renter’s insurance covered in the cost of the lease?
Make sure you know whether you will need to factor in the cost of renter’s insurance for the office space into your budget calculations. Renter’s insurance is relatively cheap, but this is something you should always discuss with your landlord.
5. Will the rent increase over the term of the lease?
What looks like a great deal now may seem less appealing if you suddenly face steep increases in your rental price. Many landlords are now including “escalation clauses” in their office space leases, which will set how and when rent may increase. This could include graduated steps over the life of a commercial lease.
Office Space and Amenities
In addition to knowing how much you’ll be paying for the office space, you’ll want to be clear on exactly what your money will be getting you.
6. What services and amenities are available?
Depending on the commercial building type, you may have access to services such as security and reception. Telephone and internet may also be included. There may also be shared amenities and spaces, such as lobbies or conference rooms. Depending on services and amenities included, they may outweigh the cost of cheaper office space.
7. What about parking?
Is there parking at the building? How much does it cost for tenants? What about parking for your clients and guests? You’ll want to see if parking is included, how much a parking pass will cost, and determine if this factor interferes with your ideal budget for your new workspace.
8. What’s the floor plan of the space you’ll be leasing?
Be sure to get a copy of the office space floor plan early on in your negotiations, and carefully consider if it will match your business needs. Two office spaces may have the same square footage on paper, but the layout can drastically impact how much of that space is actually usable.
9. What are the signage opportunities available?
Will people be able to easily find and/or identify your business? Branding is vital for any business, and having your company’s logo and name in view of the general public and potential or current customers is a vital part of building your brand image. Be sure to ask your landlord what signage options you have before signing your lease (including building and monument signage).
10. Who are the other tenants in the building — and what happens if your competitor wants to move in next door?
Is the business next door going to generate a lot of noise in the building when you’re trying to have an important meeting with your top client? What happens if one of my closest competitors wanted to move into the building? Be sure to negotiate these issues with your landlord before signing your lease if you think it’s necessary for your business.
Lease Length and Flexibility
11. What lease terms are available?
Lease terms can vary depending on what a specific tenant wants/needs for their business. Make sure you ask about alternative leasing options when looking for commercial office space to ensure you settle on what is best for you and your business.
12. Will you have an option to renew at the end of the lease?
When your lease ends, unless it states otherwise, your landlord has no obligation to offer you the same office space or rental price. If you want to stay on at the end of your lease, you may find yourself facing an increase in rent to match market rates. Check whether a renewal option is included in the commercial lease – and if not, consider negotiating one before you sign.
13. Will you be able to sublease?
Let’s say halfway through your office lease, the space is no longer meeting your business needs. Can you sublease the space? If so, what terms will you need to meet? Be sure to clarify this with your landlord and confirm these terms are included in your lease agreement before you sign.
Final Thoughts
This may seem like a lot of information to gather, but by taking the time to fully understand your lease now, you can save yourself a lot of time and headaches in the future. When it comes to leasing office space (or any commercial space), it’s better to be overly prepared than not prepared enough.
Photo by Nastuh Abootalebi on Unsplash
