You’ve finally found the perfect office space for your business. Whether you’re new or established, a “solopreneur” or you manage several employees, renting office space (the right office space, that is) is critical to your company’s growth, productivity, and day-to-day operations.
You might be tempted to sign a lease on the spot, but before you make things official, take a moment to consider these 5 important, and often overlooked, elements of a rental office space.
Know Your Building’s Condition
Make sure you know the condition the space will be in when you rent it – don’t sign a lease or give the landlord a down payment without having seen it first and pointing out any damages you notice. Clarify whether the repairs will be made prior to your moving in, and who will be responsible for any current and future repair costs.
You’ll also want to make note of whether the office will need superficial improvements like a new paint job or carpeting. Certain landlords will require you to pay for these aesthetic changes, some have a reserve for such improvements, and others won’t allow their tenants to alter a leased space in any way. Before signing the lease, establish the boundaries of what you will and will not be able to alter during your time as a tenant.
Unlike residential spaces, commercial leases typically require that the tenant pay for maintenance and repairs out-of-pocket. Every landlord quotes their rental rates differently. One landlord’s NNN (net, net, net) rate may include taxes, utilities, and maintenance, and another might not include anything. Be sure to ask the landlord explicitly what is and isn’t included in the quoted rate. Otherwise that deal you think you’re getting might result in a pile of extra bills on your desk.
You should also ask about your responsibility for capital expenditures like the roof, HVAC, and the building foundation. A larger building with multiple tenants will likely have rolled these costs into the rent. Whereas, if you’re the only tenant in a smaller building, you may be responsible for these larger expenses.
Consider Your Surroundings
The people and places that surround your office space can hugely impact your business. Consider the other tenants in the building: are their businesses similar or completely different? Depending on your industry, you might not want to be located next to a competitor (a retail store might even want to look into exclusivity rights that prevent a competitor from renting in the same building).
When you visit the space, make note of cleanliness and noise—will you really love this space as much if you can hear your neighbors yelling on the phone all day?
Make sure the building’s location meets your business’ needs. A client-facing business will likely require a more central location than a corporate head office, but if you can’t easily access the space by public transit, you’ll want to look into nearby parking options for your employees.
Understand Off-hour Rules
Most offices work standard 9-5 hours Monday through Friday, and occasional Saturdays. But some offer their employees the flexibility to choose their office hours. If your business offers such flexibility or if you operate during off hours, be sure to confirm permission with the landlord. You might need to negotiate an after-hours price to ensure you would still have amenities (air conditioning in the summer; heat in the winter) during those off hours.
Your Company’s Future
Do you know where your business will be in 6 months? One year? Five years? If you’ve signed a five-year lease, you’ll want to make sure this office really will be the perfect space for your business in five years. Now is the time to consider every potential direction you may take your business in.
Perhaps your business is strictly service-based—consider whether you may one day start selling products. If you own a retail store, you may one day want to eliminate the physical store and go completely digital. Or maybe you have plans to add an entirely new department to your team.
It’s as important to know where your business stands today as it is to consider the future. You don’t want to get stuck in a long-term lease in a space that won’t allow you to maximize your business’s full potential.
If you’ve considered these five factors and an office space still meets your criteria, you can sign that lease knowing you’ve taken all necessary precautions to ensure you’re getting the best value for your business.