Become an expert office space hunter and lease negotiator. All it takes is adding about 30 words to your vocabulary and gaining an understanding of the motivations of each party in the process.
The term “usable square feet” describes the exact square footage of the commercial space you’re leasing. This refers only to those facilities that your company will exclusively occupy, including office space, storage space, and private bathrooms. If you’re leasing an office or a suite of offices in a business park, “usable square feet” does not refer to areas that exist outside of your exclusive space. In plain terms, usable square feet means “what you see is what you get.”
There are three major flavors of commercial real estate leases—and while the exact use of these definitions may change building by building, a basic understanding of these broad types will help you compare different options.
Fulfilling a business’ office space needs can happen in one of several ways. Oftentimes, a company leases or subleases empty office space in an existing building or, alternatively, buys or leases an existing space and runs renovations on it to customize it to their requirements. A much more costly option is to, of course, build a facility from scratch. More and more companies, however, are considering a more cost-effective alternative that provides a tailor fit at a more affordable price point, via a build to suit lease.
Negotiating the tenant improvement allowance in a lease can be one of the most central and high-stakes elements of lease negotiations. This allowance provides tenants with funds for retrofitting or renovating an office space to their specifications. Not negotiating this lease issue adequately can have a significant impact on a tenant’s bottom line over the term of a lease.
Everyone wants to save a buck, and if hard work and perseverance can knock a few thousand off the cost of a real estate deal, many of us are inclined to go it alone. But is it worth it to sift through many listings in the target area and suit up for aggressive negotiations without using a commercial real estate broker? This article examines the pros and cons of finding your own office space versus using a broker's expertise.
You’ve found a few good spaces you like; now the objective is to obtain the best deal possible. Ideally, more than one of these spaces is exciting for you so that you can hedge them against each other to maximize your negotiating leverage. If there’s only one that floats your boat, keep your head on the swivel throughout the process – new spaces surface every day. The more options you have, the more leverage you maintain.