Office Lease Checklist
When negotiating the lease for an office space, the same issues frequently arise. This article is the first in a series of four articles that provide office lease checklists for office tenants to use to review their office lease. Use the checklists below and in the articles that follow to make sure your office lease reflects what your tenant representation broker negotiated and to make sure problems won’t arise during your tenancy.
These office lease checklists are just a starting point. Office tenants should retain a qualified, experienced tenant representation broker to negotiate their lease and a commercial real estate attorney to negotiate and review their lease contract.
Office Lease Checklist: What is Being Leased?
- Does the square footage match what it should be? Is the loss/load factor satisfactory? Is the property described with enough detail that it could be found by someone who had never been there before?
- Does the property exactly match the provided floor plan? Does the floor plan also include incidental areas such as hallways, equipment areas, etc.?
- Does the project consist of multiple buildings and/or uses? Is there ongoing construction in the development? How will future construction affect property taxes and your operating expenses?
- Does the lease describe an agreed-upon method of measuring square footage?
- Does the lease include parking spaces? Are there any problems with the amount of parking available and the associated fees? How far is the parking from the building? Does the agreement allow the landlord to move parking to an off-site location? Are systems in place for movement to and from parking areas?
- Are common areas clearly and accurately delineated? How much access and use of common areas is the tenant allowed?
Office Lease Review: What is the Rent?
- What services will be paid by the landlord? Will the tenant be responsible for building taxes, maintenance, and/or insurance ?
- Is the tenant responsible for direct payment of utilities or other fees? What are the utility fees? When are they paid?
- Does the agreement provide any period of complimentary rent? How much will the rent increase by annually? On what date do increases take effect?
- How much is the Pro Rata Share? Does the agreement provide for changes?
- What will the total operating expenses for a year amount to? What about taxes?
- Is the tenant granted the right to review and confirm the operating costs?
- What about the building’s hours of operation? Do they make sense? What days/hours are excluded?
- Which hours of A/C and heat usage will be added as extra charges? For after-hours usage, how will fees be assessed? How much will charges amount to? Are charges in line with what they should be?
- Do the operating expenses, as defined in the agreement, match the modifications to base year recorded in Exhibit A? Does the agreement allow for avoiding a reassessment as required by Proposition 13?
At Golden Group Real Estate, we specialize in tenant representation real estate services for office space users in the Chicago area, helping local business owners find office space and negotiate lease and purchase agreements. We never represent landlords, so we are prepared to negotiate aggressively on behalf of our tenant clients.
For more on Golden Group Real Estate, read about our real estate services. Let us know if we can help you find office space for rent or buildings for sale. Call us at (630) 805-2463, email us at [email protected].