Finding a great office space is imperative if you want your company to thrive. There are so many factors to consider as you begin your search. Not only do you need to make sure that you find a space that is of the right size, but one that meets the long-term goals of your company (if you want to avoid making a similar move in the near future). For example, if you are planning on growing the company over the course of the next year or two, you will want to acknowledge this as you walk through potential office space rentals. Once you have determined the needs of your company and located the perfect space, it’s time to negotiate your contract. Take a look at these tips to make sure you are getting the best deal possible.
If you are new to renting office space or perhaps just not so well informed in the market, your first tendency might be to look for the cheapest monthly rent. However, there is much more to finding the right office space than just the initial cost of rent. Learn the total value of the property by using this simple formula. Take your annual rent (including taxes and any projected yearly escalations) and multiply it by the term of the lease. Deduct from this number any free rent your landlord has offered, as well as any money the landlord is willing to contribute towards the improvement of the property. This will give you a real number to work with and you can see how that fits to your budget and needs.
Investors purchase office space as a means of generating more cash flow for themselves. Like any other type of real estate, the longer the property sits vacant, the more the investor stands to lose. Knowing how long the office space you are considering has been sitting on the market will secure you some leverage when negotiating with your potential new landlord, particularly if you are able to make the move into the new space sooner rather than later. Your ability to quickly transition will offer the landlord rental income in a much shorter time period than it may typically take.
The length of your lease term is one of the other concepts where you can gain some leverage in your office space rental negotiation. There are two ways on how this can go. If you know that you’d like to plan on staying in the property for a longer period of time, consider suggesting a longer lease term (4 years). This means more stability for your landlord by ensuring that the property will not stand vacant for a greater length of time and may help to convince them to lower your monthly rent or make other adjustments to the lease. On the other hand, if you plan on expanding the company, your needs may change and this particular space may not suit them down the line. If that’s the case, try negotiating for a shorter lease term (2 years) with the ability to renew the lease at that time.
If the office space you have chosen is perfect for you but needs a little TLC, this could be another opportunity for you to negotiate with your landlord. Remember that your landlord wants to keep their rental property occupied, so in many ways it as important to them that you thrive as it is to you. If there are obvious upgrades and repairs that might make the property more attractive and/or functional, consider asking your landlord for a Tenant Improvement Allowance, which is an agreed upon sum of cash that the landlord will either give up front or deduct from your monthly rent to fund changes to the property.
When it comes to renting office space, leases can be peppered with one-sided terms and nuances that could go unnoticed. Use a keen eye to make sure you are clear on all of the details and negotiate anything that doesn’t feel right by sitting down and reviewing the lease with your landlord line by line. It may help to have an experienced real estate lawyer present to help you get through the process.
If you are starting your search for the perfect office space in or around the Baton Rouge area, let SVN | Graham, Langlois & Legendre work with you. With our team of dedicated advisors and a huge database of properties available, we are confident that we can help you find the office space that suits all of your needs. Search through our properties today and reach out to us to get started.