5 Tips for Leasing Office Space
By Mike Vannest
Whether you’re an established business looking to relocate to a new building or a start up thinking of moving into your first office, entering into a lease can be a stressful endeavor. Here are a few tips to keep in mind when leasing office space.
1. Start Early
Give yourself at least nine months to complete the process and evaluate all of your options. Many times people wait too long to find an office and are then forced into making quick decisions. This can lead to a bad deal on a lease or a less than desirable office space.
2. Have a budget and know the price per square foot (PSF)
Know exactly what you can afford and stay within that budget. Understand that you will only need roughly 200SF-250SF per person in your office. Be sure to ask what the price per square foot is as wll. Knowing your budget and PSF will help you make sure you have a cost effective office.
Here is a quick chart outlining approximately how much space you might need:
Employees Requiring Offices
- President (400 sq. ft.)
- Vice Presidents (200 sq. ft.)
- Managers (150 sq. ft.)
- Secretaries (125 sq. ft.)
- Customer Service Reps (125 sq. ft.)
- Accountants (150 sq. ft.)
- Programmers (125 sq. ft.)
- Engineers (175 sq. ft.)
- Data Entry (125 sq. ft.)
- Clerks (125 sq. ft.)
- Temporary Employees (100 sq. ft.)
- Reception Area (100 sq. ft. + 10 sq. ft. per person waiting)
- Conference Room (50 sq. ft + 25 sq. ft. per person seated)
- Mail Room (125 sq. ft.)
- Work Room (125 sq. ft.)
- File Room (200 sq. ft.)
- Storage Room or Library (200 sq. ft.)
- Lunch/Break Room (75 sq. ft. + 25 sq. ft. per person seated)
- Other Specialty Areas (size varies depending upon usage)
3. Ask questions
Ask your potential landlord a ton of questions prior to signing anything. A few to ask are: What is the renewal policy? Is there an auto renew? What kind of yearly rental increases are there? What does the insurance charges cover?
Be sure to do a web search of other questions to ask as well.
4. Understand the lease types
There are many types of commercial leases and some overlap. Because certain types of leases may include services (like, janitorial, utilities, etc.) other lease types do not, it is important that you specifically ask what kind of lease it is, as well as if it includes services, load fees, percentage fees, or other fees association with "net" leases.
Types of leases typically offered in commercial leasing include:
1. Double Net Lease
2. Fully Serviced Lease
3. Gross Lease
4. Net Lease
5. Percentage Lease
6. Percentage Rent
7. Rentable Square Feet
9. Triple Net Lease (also known as NNN or Net Net Net Lease)
5. Read the lease
Above all else read every last page of your lease. Know all of the ins and outs. The deposit required, the termination clause, the alteration policy. Having an understanding of the entire lease will keep you from dealing with any surprises.
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