When it’s time to lease commercial office space for your business, you may be thrilled to have found what seems to be the perfect place for you. Or maybe you’ve identified several properties and are weighing the pros and cons of each. Or perhaps you are just getting started and looking for a sense of direction. Wherever you are in your search for office space to lease for your business, you’ll want to weigh several considerations before you sign on the dotted line.
Essential considerations before leasing commercial space for your office
Here are our top eight things you’ll want to examine closely before you sign a lease for office space.
1. What is and isn’t included in the rent
Renting commercial office space can include some costs on top of your rent, so be sure you have a full understanding of your financial responsibility before signing. Some leases specify that the tenant is responsible for items like property taxes, insurance and more.
2. Modifications and improvements
It’s natural to want to make a space your own so that it’s representative of your business and your brand. But you may not know that modifications you make could require sign-off from the landlord. More, your landlord may take ownership of those improvements when the lease agreement ends. As long as you understand the agreement and don’t mind, it’s great. But if you have concerns, you may want to bring them to the negotiating table.
3. Property repairs at lease end
It’s important to note that some leases may require the tenant to return the property to its original condition at the end of the lease. That could result in costly, unanticipated expenses just for normal wear and tear on the office space. Be sure to read this portion of the lease carefully and negotiate if needed.
4. Restrictions on signage
When you’re establishing a presence for your business, it’s natural to want to hang signage to build your brand. But some lease terms specify that a tenant may not hang signage or may limit where you can hang signs and what you can post to promote your business. Be aware of any limitations or expectations, and negotiate if necessary.
5. The lease term
Knowing when the lease begins and ends seems like an obvious consideration, but you may have some flexibility in negotiating with your landlord, particularly if you are willing to sign a longer lease. On the flip side, you may want to negotiate a shorter-term lease with options for renewal, depending on the market and your business needs.
6. Rent increases
Pay attention to any rent increases specified in the lease, or be certain that your rent is fixed for the term of the lease. And if any rent escalations are noted, be sure you have a full understanding of how they will be calculated. You may be able to negotiate a cap on the rent if you wish.
7. Possible deductions from the security deposit
When it’s time to go, it may be bittersweet, in particular if there are huge sums being deducted from your security deposit. Be sure you’re clear on what you need to do to get that security deposit back, or what you are likely to see deducted from it.
8. Lease termination
The process for early lease termination differs widely from lease to lease, so be sure you are aware of the procedure. Some leases automatically renew if a tenant doesn’t give notice beforehand, and that can create frustrations and unanticipated expense. If the lease doesn’t spell out your right to terminate, see if you can negotiate terms in order to give yourself the ability to exit the agreement if need be.
Negotiating lease terms: part of the office space leasing process
No two lease agreements are the same, so typically you’ll want to have a full comprehension of specifically what you’re signing before you shake hands on the deal. This is not only a vital step in getting the right property for your business, it gives you an opportunity to negotiate terms of the agreement when needed. When done, you’ll have the peace of mind you want locked in before you move in.