Part of a great office lease deal is controlling your costs as much as possible. And, while cheapest is not always best in terms of the rent itself, there are other aspects of the overall process you can affect to save a little money on your rental budget.
- Bring competition to the negotiations. If you’re at the table, it’s highly likely that your prospective landlord considers you a suitable tenant. Therefore, injecting a little competition between prospective landlords can prove to be a very useful strategy when negotiating a new lease or renegotiating an expiring one. To that end, not only should you be looking at multiple spaces, but you should also make it clear that you’re doing so. Granted, you don’t need to go into any specific details on any of the competing prospects — in fact, that may end up reducing your leveraging power. Rather, it’s enough to simply make it clear that you’re considering other options.
- Find office space listings that best address your needs. The old saying, “A stitch in time saves nine,” very much applies to how you align yourself with the practical needs of your business. Specifically, although you might not find a space that fits you perfectly, it’s in the best interest of your future expenses to settle on something that addresses as many key aspects as possible. For instance, it might be essential that you get a certain amount of square footage. Alternatively, you might be okay to compromise on the size of a space if it offers a specific layout. Likewise, depending on how your business operates, the position of some common areas can affect the usability of your work environment. So, if possible, collaborate with a space planner before beginning your search in order to identify and outline any specific options that might work for you.
- Consider construction and buildout work. It’s essential to be mindful of future costs, such as any structural alterations or modernization of your future space. In this way, the better a listing initially addresses your needs, the smaller your investment (or the landlord’s concession) will need to be before you settle in. So, have a good idea of what you need before you start your research — as well as a very good idea of how much any additional fixes would cost — before you sit down to negotiate your lease. Gathering competitive bids is well worth the effort for any construction needs associated with your relocation.
- Plan ahead and start early. Small commercial tenants should plan for a buffer time of roughly six months between beginning a search and moving in. For medium-sized businesses, it’s generally recommended to start prepping for a move as early as 12 to 18 months ahead of time. For large-scale businesses with hundreds of employees, prep time should be in the planning stages as early as two or even three years prior to the desired move date.
- Have adequate tenant representation. If at all possible, avoid depending on in-house services offered by the landlord, such as an architect. Instead, put together your own team of consultants to advise you while you’re evaluating the space. Any broker, architect or contractor that you work with should be working in your best interest.
- Consider renewal option clauses. Even though these aren’t a concern in the short term, it’s financially beneficial to consider them during the evaluation process. In particular, be mindful of specifics, such as notification periods, rent penalties and sublease provisions. Meanwhile, the ability to sublet a section of your lease in the event that you need to reduce your used area for any reason can also enhance the marketability of a space.
- Leave room for future adjustment to the lease. Most commercial leases are rather long-term and, because all parties involved desire stability, it’s important to account for the inability to tell the future. For example, business conditions can vary from one year to another — or even from one quarter to the next. Therefore, it would be wise for both sides to build some flexibility into the terms of your lease. This will allow you to adapt your budget more responsively on the go — as well as increase your chances of weathering any rough patches.