10 Things You Should Know Before Leasing Office Space

When it comes to leasing office space, there are a lot of points that can be overlooked. Below are just a few considerations that you should be aware of that can save you invaluable time, money and future problems.

1. Understand your minimum square footage. This seems like a no-brainer but before doing anything you should have a good understanding of your minimum size to keep yourself from touring buildings that could never work for you.
   
   
2. Try to tour the space near arrival times for your employees. For most companies this is 9AM or early morning. Its important to know what parking is like when your employees will arrive. Avoid after hours showings for this reason.
   
   
3. Verify that the square footage quoted is correct by getting certified drawings. You can also count ceiling tiles to see if the dimensions are accurate. Most ceiling tiles are either 2'x2' if square or 2'x4' if rectangular.
   
   
4. Focus heavier on free rent rather than lowering a rental rate. Landlords may be more negotiable with free rent rather because decreasing the rental rate lowers a building’s value. You are more likely to get a landlord to give you a bigger discount using free rent, especially in a market with high vacancies.
   
   
5. Do a search for sublease space. These are harder to find if you don’t do commercial real estate for a living but you can often find subleases by typing “sublease” in google followed by your city and state abbreviation. Subleases are not always available, but if you find one, you can expect discounted rates, flexible terms and maybe even free furniture.
   
   
6. Rental rates need to be adjusted before comparing them. Ask if the a building you are looking for has a load or loss factor. A load/loss factor is the percentage of the building shared by all tenants of the building (lobbies, hallways and bathrooms). The square footage that you pay rent on, rentable square footage, is calculated by adding this percentage to actual square footage of the suite, usable square footage. A building with a 5% load factor at $21.75 per square foot is actually a better value than a building with a 15% load factor at $20 per square foot.
   
   
7. Get a good indication of market vacancy as well as how long the specific space you are looking at has been vacant. This will help tremendously with negotiations.
   
   
8. Get a copy of a blank lease from each site you tour even if you aren't interested in leasing there. This will give you a good idea of what clauses are “market” and which ones are unreasonable or unique to a given property. If at all possible, try to get it in a digital format for easy searching.
   
   
9. Understand what the building hours are (if applicable) and what after hour HVAC and electric costs are. Some buildings charge a substantial amount for this service.
   
   
10. Lastly, I heavily recommend consulting with a professional. If you found the above tips helpful, realize they were written by a commercial real estate agent. Aside from having genuine market knowledge, a professional will save you a tremendous amount of legwork as well as make sure that you get the best deal. Just as in residential, a buyer or tenant agent should be at no additional cost to you, so it makes a lot of sense. If you would like help finding the best agent for your requirements, please don’t hesitate to contact me; if I can't help you I can qualify someone who will. You can reach me directly at 813-739-5718 or by email at srupp@prucomm.com