Office Space

Which Office Space To Lease: The Financial Decision

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Office Space

Choosing an office space for lease can be a tough decision. In addition to finding the prime location, you want to be sure that your office space has all of the amenities and proper layout that you desire. You should also be certain that the lease is a financially sound decision for you and your company. It often takes a thorough financial analysis to determine if the lease you are intending to sign will be one which is best for you. The following will highlight some ways in which a financial analysis can play a key role in the decision-making process, and which office space to lease.

Helps To Highlight the Various Leasing Costs

When you complete a financial analysis you are laying out the individual leasing costs. Items such as base rental pay, operating expenses, operating expense increases, parking fees, common area maintenance fees and more will be detailed and allow you to get a better sense as to what the total cost to you, the tenant, might be. Many office space tenants make the mistake of not completing a financial analysis which can lead to serious financial trouble in the future when they find that additional costs are present and these costs simply can’t be met.  The financial analysis will list out all of the costs associated with a prospective lease and allow you to determine if the lease agreement will be the right one for you to sign.

Financial Analysis Can Aid In Landlord-Tenant Negotiations

In addition to providing you with a detailed list of leasing costs for your future commercial office space, a financial analysis will also aid in various landlord-tenant negotiations. You never want to simply sign the lease and not try to negotiate any of the lease terms with your landlord.  No term is set in stone when it comes to commercial office space leasing and there is always the opportunity to negotiate the best lease deal. When you have a complete financial analysis prepared for a specific office space, you can take those details with you when you speak with the landlord regarding certain lease terms. This will help you in the negotiation process and make it more likely that you get a reasonable deal on your future lease. The financial analysis will not only provide you with evidence of certain costs but will also show the landlord that you are taking any future leasing quite seriously.

Preparing a financial analysis prior to signing a lease is essential in commercial real estate leasing arrangements. This type of process allows you to thoroughly review your options and elps to ensure that the decision you make will be the right one now and in the future as well. A tenant representative can help you to prepare a financial analysis and will be with you when it comes time to speak with the landlord. By having this financial analysis completed, you will ultimately know which office space to lease by determining which is a financially sound decision for you in the long run.

Office Space

Office Space: How These CAM Costs May Be Overlooked

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Office Space

Many times a business owner who is interested in leasing office space will forget to consider common area intenance, or CAM, fees when they are comparing prices and figuring out if the lease is affordable. CAM costs are fees which the landlord charges in order to offset their expenses related to maintaining the common areas of the office building. There are a few different reasons why these CAM costs can be overlooked.

Office Tenants Don’t Read the Lease

Fees, such as CAM costs, should be properly stated in the leasing agreement. However, some business owners are in such a hurry to get into their new office space and are overwhelmed by the legal agreements for leases that they simply don’t read the lease completely and fully. This can make overlooking the CAM fees pretty common. When you lease office space, you always must consider that CAM costs will be an issue for the tenant. Most landlords will make these fees a part of the leasing arrangement to ensure that they won’t be stuck with paying for common area maintenance.

New Office Space Tenants May Not Be Familiar with CAM Fees

If you are a new office space tenant, having never leased an office prior to this point, you may not even know that CAM costs are an issue. Many new office space tenants simply think that commercial office space rent is all that will need to be paid throughout the course of the lease agreement. This is not the case. Therefore, you should always be aware that CAM costs are common and must be factored into the total amount of the lease.

Business Tenants Might Not Have a Tenant Representative to Help

Many business owners go into leasing commercial real estate without a tenant representative by their side. This can be a costly mistake as they may enter into an agreement without fully understanding what they are doing. A tenant representative will always point out the CAM costs and make sure that the business owner tenant is able to afford such costs. In addition, a tenant representative will know how to negotiate with the landlord regarding CAM costs and may be able to get a lesser fee when it comes to CAM costs charged to the tenant.

CAM costs are easy to overlook when leasing commercial real estate, especially if you are new to commercial office space leasing. These costs can be expensive in the end and it is important to know how much you will need to pay for common area maintenance and see if you can negotiate these fees so that they are affordable. Before you enter into a leasing agreement, make sure that you thoroughly review the contract and be certain to focus in on any CAM fees which are included in the agreement. A tenant representative is the best person to have by your side when leasing office space and reviewing the agreement. This individual will ensure that you are properly informed as to any and all fees, such as CAM costs, which may be part
of your future lease.

Office Space

Leasing Office Space: Internet/Phone Costs Can Affect Your Decision

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Office Space

When you lease office space, there is more to think about than just paying the rent throughout the lease term. If you lease an individual office space, you will have to often pay for necessities such as furniture, office equipment, phone, Internet and more. Phone service and Internet access are two vital necessities for businesses to possess. However, such amenities can be costly, to say the least. It is these two things that will often factor into your decision as to what type of office space to lease.

Individual Office Space Leasing Means That You Pay For Phone and Internet Service

If you are interested in leasing your own office space, you should be prepared to pay for your phone and Internet service. Not only will you have to pay the monthly bills for these utilities but you will also have to pay for and arrange set up of the phones and computers within the office. Although you get to choose your service plans and configure the items as you wish, it can be a bit of a headache for office space tenants, especially the less than tech-savvy ones.

Shared Office Space Options Usually Include Phone and Internet Service

Your other option for leasing office space is to choose a shared office space location. With a shared office space, you and the other office building tenants will share amenities such as receptionist, mail service, conference rooms and more. It is also in this type of office lease setting when you often have phone and Internet services included. This means that you will already have your phone lines and computer access set up and many times these amenities will be included in your office space rent. You will have unlimited access to phone calls and Internet capabilities for one set price. This can be extremely cost-efficient for your business, especially if computer usage and phone calls are frequent.

Deciding Which Is Right for You

If you are indifferent as to which type of office space you choose, individual or shared, it is always wise to look at the monetary details. Selecting a shared office will allow you to have Internet and phone service included in your rent and not have to deal with setting up these technology avenues. On the other hand, if you choose an individual office, you will have your own space but still need to pay for and set up phone and Internet service. This can be an easy deciding factor for many business owners who wish to have their costs included and ensure that everything is set up and ready to go. Both office space options have their pros and cons. The best way to decide is to determine if cost is an issue when it comes to phone and Internet service. If so, then you should look into the shared office space option and see how much money you will be able to save if you choose to go this route with regard to commercial office space leasing.

Office Lease

Office Leasing: Benefits Of A Built To Suit

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Office Lease

As a business owner looking to lease office space, you typically have two main options: lease an already existing location that is ready to go or obtain a built to suit office space lease. Some business owners decide that leasing an already existing office is their best bet as it is all ready to be leased and may be more cost efficient as opposed to the alternative.  However, other business owners like the idea of a built to suit office lease.  Here are some benefits to choosing a built to suit office leasing avenue:

 

Get the Office Space Which Suits Your Commercial Business Needs

The best thing about a built to suit office lease is that you will be gaining a location which is built to suit your individual commercial business needs. No longer will you have to accept an office space which might work but not be the best that it can be. With an office lease which is built to suit, the developer will build the office space for you and then lease the premises to you. Throughout the process, the developer will ask for your input and ensure that the finished product is what you envisioned all along. Keep in mind that the lease term for a built to suit lease will be longer than a regular office space lease.

Lease an Office Which Is Often Environmentally Friendly

Another excellent benefit to the built to suit office lease is that many times these office spaces are environmentally friendly. Because the developer may receive certain financial incentives for making their new building energy-efficient, they are more likely to do so which will benefit you in the long run. This means that utility costs will be more favorable and much of the components within the office space will be technologically advanced as well. The end result is an office space which is environmentally friendly and cost-efficient.

Cut Renovation/Addition Costs One Might Incur With an Existing Office Space

It is not very often where a leased office space has everything which the office space tenant desires. That is, unless it is built to suit. A built to suit office lease will help you to cut any renovation and addition costs which you might incur as a result of your ready to lease office space not having everything you want and need for commercial space. Although you may pay more to lease a built to suit office space, you will ultimately save money in the end by not having to fund renovations or additions to the premises.

Built to suit office leases are the perfect answer for business owners who know exactly what they want in their office space, cannot find what they need in already constructed office space and are looking for a location which is up to date with regard to fixtures and overall construction. You will find that more developers are getting involved with built to suit office leases and there is quite a lot out there when it comes to builders who wish to enter into this type of arrangement with business tenants.  If you are searching for a specific office space and want to lease as opposed to buy an office, perusing your built to suit office lease options is a wise choice.

Office Lease: How Long Of A Term Should You Sign?

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Commercial office space leases are unique in many ways. One way relates to the length of the lease term for the commercial office space. As opposed to residential leases which are usually on an annual basis, commercial leases are a bit longer. You can choose a 3 or 5 year lease in some cases while other landlords require a 7 or 10 year lease when they want the tenant to stay in the leasehold for a bit longer. This will vary by location and landlord preference as well.

When trying to decide which type of lease term is right for you and when you want to choose an office space to lease which offers you the desired lease term, the following considerations will help:

Desire to Permanently Lay Down Roots in the Area

For business owners who know that this town or business center is where they would like to stay permanently, it makes sense to lease the office space for as long as possible. Unless you are interested in buying an office space within a few years, you want to reserve your current location as long as possible, especially if you want to stay in the area for the long term.

How the Location Suits Your Business

If you look at a lease option in a particular area and know that this will be a lucrative locale for your business, you can lease for a longer period of time. For those business owners who want to lease an office space in a current location but may not be sure how they will do overall in that specific area, a shorter lease term is advisable.

Budget Issues

It is good to know that the longer the lease term, the less expensive the lease may be. If you are leasing with monetary considerations in mind, which most business office tenants are, then getting a longer lease, if possible, will yield better financial results for you. Be sure to inquire with your landlord as to the cost for shorter and longer lease terms. Some landlords will offer the lease for the same amount, no matter how long the lease term may be, while others are amenable to lowering the price for a longer lease term.

Plans To Expand Employee Base

Another factor which will help you to decide how long of a lease term to enter into involves your current and future employee base. If you are going to stick with the general number of employees in the future and do not foresee plans to increase your employee base, then you may want to sign for a longer lease term as you won’t have to be concerned with the amount of office space in the future since your employee number will remain similar to the employee number you currently have.

Deciding on the length of the lease is an important consideration. You want to try to think ahead and determine approximately how long you will want to stay in that same location. Even though this may be a difficult decision to make so early on, it is something which must be considered prior to signing your new office space lease.