Leasing Office: A Preleasing Checklist
Perhaps you want to rent office space for the first time, or your current lease is up for renewal, and you’re looking to renegotiate your lease. Regardless of your business’ circumstances, there are essential questions to consider if you want to sign a new office space lease. When should you begin previewing your options? What do you need to consider when you tour properties?
With the right questions in hand, the pre-leasing process can be a smooth transition as your business finds the perfect office space for your needs.
For startups, small business owners, or large corporations looking for new office space, Silver Star Properties’ Pre-Leasing Checklist will help you properly plan to negotiate your upcoming lease.
Leasing Office, the Right Move
Every organization has a unique set of demands that any office space, new or existing, must fulfill. By considering present and future business factors, you will ensure you won’t be searching for new office space again, or at least not anytime in the near future.
Whether you are a new business looking to get better established or a large corporation looking for a change, navigating the array of options out there can be confusing. There are a few core reasons your business may be renewing an existing lease or looking for new office space.
1. Your business is growing. Look at your employee statistics in the past five years to project your growth. If the numbers support growth, you may need to start looking for a larger space to lease for your growing business.
2. You need a specific location. While owning property can be great if your business requires a certain level of visibility or a particular area to succeed, in many cases, leasing office space is the easiest way to achieve this. When leasing space, finding the ideal location for both your employee and customers is key.
3. You need a storefront. Many businesses benefit from a storefront to grow their brand and business visibility. Leasing office space allows you to choose a location with ample foot traffic and access to your customer base.
4. It saves time. If your business is growing quickly and you suddenly have an immediate need for office space, leasing space can me the most efficient way to accommodate your needs.
Questions to Consider when Leasing Office Space
For any organization, considering specific criteria are helpful before making an office move and committing to a commercial office space lease. Consider these four questions before making your move.
1. Is staying at your current location the best opportunity?
For many businesses, location is everything. Sometimes the best option for your business is to stay in your current location, as you save costs of moving and the headache of changing locations. In some cases, reviewing your leasing options at the end of your current lease can help you save money in your renewal negotiations. Many landlords are willing to negotiate lease terms at renewal to maintain an existing tenant, as vacancies and new tenants are expensive.
2. Is a relocation the best fit for your business? Ask yourself:
- What reasons do you have to consider relocating? Sometimes adjustments to lease terms, or reconfiguring the layout of your existing space, can make your current office space continue to work for your business.
- Would it help your business? Moving to a new location may help your business by increasing foot traffic to a retail location or saving your business money on its bottom line each month, reserving cash for other business investments.
- Would it help your brand? In some cases, acquiring an ideal storefront location with access to foot traffic from customers supports business growth. In other instances, office space location does not impact brand growth.
- How much are moving costs? It’s important to consider moving costs as they may outweigh the cost savings of the lease terms at a new location. In many lease renewal negotiations, it can be advantageous to appeal to your current landlord for new lease terms rather than spend the money moving your business location.
- What are the operational costs differences? Many commercial office space leases are triple net leases, meaning that the tenant is responsible for a portion of the property expenses. Depending on the size, age, and maintenance level of a particular building, these expenses can vary widely.
- Tenant Improvement costs – How much does the landlord give for tenant improvement allowance, or will you cover all expenses? Sometimes a new office space seems appealing because of a lower overall monthly cost of rent and triple net lease terms. However, it’s essential to consider the expenses your business will incur to make the office space used for your specific business operations. Is the space ready to use, or will you need to change the layout, paint, or add bathrooms to make it an ideal fit for your business?
3. How far in advance should you plan ahead?
Every business is different, so it’s crucial to analyze the growth trajectory of your business against your current lease terms to determine when to begin your search.
- When should you start looking? You should begin your market research 6-24 months before your current lease ends based on your business’s specific circumstances.
- When should you start planning to move? Finding a suitable space and negotiating your lease may take a lot of time. Beginning the process 6-24 months ahead is essential to thoroughly prepare for an office move.
- For a first time lease, allow yourself 1-6 months to analyze a new market location.
4. Who needs to be involved in the move?
Moving a business to a new location is a big undertaking. Not only do you incur the costs of the actual move, but you also need to factor in the cost of tenant improvements and business downtime. Timing your move appropriately has financial implications for your business. The following key personnel should be looped in when moving a business to a new location:
- Decision makers such as executives.
- HR to support employees through the moving process.
- IT to ensure easy transitions for all your technology needs.
- Marketing for advertising the new office location.
How to Find Office Leasing Properties that Meet Your Criteria?
Are you ready to begin your new office search? Consider these questions before touring new potential property and office space.
1. Consider the future of your business.
- If you are quickly growing and predict changing needs in the near future, managed office space can be a cost-effective solution, with both short-term and multi-year lease options.
2. How will the location of your business affect your customer base?
- Do your customers come to your office for your services, or do you have off-site services? For instance, if you are a business that requires a storefront, is the property you’re considering in a high-foot-traffic area? Or will customers be able to see your storefront from the road when driving by?
3. How will the location of your business affect your staff?
- Is it centrally located by most of the employees homes?
- Will it affect their commute times?
- Will you need to factor in the cost of parking for your staff?
4. How does your office space fit your overall business plan?
- How many private offices will you need? Depending on the current layout of the prospective office space, you may need to factor in tenant improvement costs to outfit the space for your needs.
- Will you need a bullpen and cubicle space?
- Do you need conference rooms?
- Will you need storage or filing rooms?
- Does the new lease cost make sense for your business? Calculating your rent percentage of income helps you determine the ideal rent percentage of income based on multiple factors specific to your business.
5. Will your new space be available when you need it?
- Time your move accordingly to the space that best fits your business. Correctly timing your new lease start date with the conclusion of your existing lease will cut the costs of paying two lease payments simultaneously and the associated costs of business downtime during the move.
Touring an Office for Lease
As you begin touring different office spaces, weighing the pros and cons is essential. Leasing office space comes with many considerations. Consider the following details when touring to find the ideal office property for your business.
- What the building looks like will reflect on your business. Large spaces such as Class B buildings versus private office space offer different vibes, which may or may not reflect your specific business. For individual or small teams, private office space offers affordable, flexible lease terms and greater control over space use.
2. Does the building office hours match your business hours?
- Finding a location with the appropriate office hours will save you non-business hour charges for HVAC and other utilities.
3. Building safety and security
- What type of security does the property offer?
- Does your business require an on-site security guard or 24-hour monitored surveillance?
4. Surrounding neighborhoods
- How much does your staff network? Do they require a variety of restaurants and entertainment venues nearby? The vibe of the surrounding neighborhood can play a vital role in employee satisfaction and retention.
5. What are the on-site amenities? Certain building types, such as class A vs class B buildings, offer a wide range of amenities that may appeal to your employees. With many amenities typically comes a higher price tag, so you’ll have to decide if specific amenities are non-negotiables for your business.
- Does the building offer lunch options, such as a deli, self-service market, or food trucks?
- Does the building have a gym?
- Does the building have a conference room?
- Does the building have a tenant lounge or break room?
6. How can the building showcase your business’s signage?
- Do they have monument signage available?
- Do they have building signage available?
- Signage will play a vital role, especially if you are a business with a storefront presence or clients frequently visit your office space.
Browse Office Properties for Lease
Whether renegotiating an existing lease or touring for a new office space, office space transition sparks countless questions and considerations. From aesthetic and size preferences to cost and timing, lining up the ideal office space lease takes forethought and education.
If choosing to lease office space is the right move for your business, this guide will help you find your ideal space. Download our Pre-leasing checklist here.
SILVER STAR PROPERTIES UNDERSTANDS QUESTIONS AND CONCERNS CAN ARISE
DURING AN OFFICE SPACE TRANSITION.
Visit our FAQs page or get in touch with one of our leasing agents for help making a smooth office transition.