Office Space

Leasing Office Space And The Hidden Costs

by Uncategorized

Office Space

When entering into a leasing arrangement for commercial office space, you may incorrectly assume that the only amount of money you will pay each month or each year is the cost of the lease. However, leasing office space can yield other costs as well. There are often hidden costs which, if you don’t ask questions or review your lease terms efficiently, you may miss these hidden costs. Here are some hidden costs which may play a part in your commercial office space lease:

Improvement and Upgrade Costs

Even though you are moving into a new commercial office lease, there still may need to be some improvements or upgrades you must do in order to get the premises up to your standards. If the landlord allows such improvements, most likely these costs are not included in the price of the lease. In other words, you will have to pay for any improvement or upgrade costs out of pocket. This is always a good consideration to keep in mind.

Maintenance Costs

Although we would like to think that the leased office will always be in tip top shape, there will sometimes be a need for maintenance services. This is often the responsibility of the tenant and you have to be sure that you will have the money on hand in order to pay for any maintenance costs as they occur along the way.

Operating Expenses

Each month, commercial tenants will have to spend money on various operating expenses. Expenses such as electric bills, shared office space expenses and more will have to be taken into consideration by the tenant. These operating expenses can add up so it is important that the commercial office tenant who leases the office space keeps such costs in mind.

Increasing Tax and Maintenance Costs

When a lease is signed, there is usually a term present within the lease related to tax and maintenance costs being included in the rent. There may also be something related to increasing tax and maintenance costs. This is the increase in costs for taxes and maintenance fees which the landlord sees and wants to make sure that such costs are passed along to the tenant. Although this is a common inclusion, it is one which tenants may not know about, especially if they are new to the office space leasing arrangement.

Pre-Existing Condition Costs

Pre-existing condition costs are pertinent for office space tenants who change conditions of the leasehold estate during their lease term. Many times a landlord will want the property returned to its prior state once the lease term expires and the current tenant moves out. This cost can be great, especially if you make a lot of changes to the property during your leasing term. Make sure that you account for such costs and see if this type of pre-existing condition clause is included in your lease.

All of these hidden costs can be ones which pop up and surprise the commercial tenant. They should be listed in the lease but you have to be sure to spot them prior to signing the lease. With a tenant representative to guide you, you can be certain that these lease terms will not be missed and will be pointed out to you by your representative at the time in which you sign the lease.

Office Space

Office Tenant Representation: Why You Need One

by Uncategorized

Office Space

The commercial office leasing procedure can be a tricky one for many commercial tenants. Not everybody is well-versed in the commercial real estate field and going in on your own to lease office space can be a venture into the unknown. As a business owner, when you go into leasing office space, you want to be able to make intelligent, businesslike decisions.  With a tenant representative to aid you in the process, you can make the right business decisions with ease.

Here are some reasons why it’s important to have a tenant representative with you as you take every step in the leasing process:

  • A Tenant Representative Knows The Drill: As a whole, a tenant representative is the commercial real estate professional you need as they know how the procedure goes. You want to have the assistance of a professional so that you get the right property at the right price.
  • Help to Determine Your Leasing Needs: A tenant representative will help you to determine your leasing needs. In other words, how much space you need, what amenities you should have, the location which will be most ideal for your business and many more considerations. The tenant representative will think of all of the things you may miss and more.
  • This Real Estate Professional Knows The Market: When you lease commercial offices, you may not know what the commercial real estate market looks like at the time. Therefore, you may not know what the cost of the commercial lease is and what the norm is for leasing commercial real estate.
  • Negotiation Skills: A tenant representative is the perfect individual to have with you when you need to negotiate your future commercial space lease.  These real estate professionals are adept at negotiating these types of commercial office leases and will get you the best deal on your future lease.
  • Tenant Interest Protection: A tenant representative acts in the best interest of their client, the tenant. In something as difficult as a commercial real estate transaction, the tenant needs someone to act in their best interest and help them through the oftentimes difficult portions of the transaction.With the assistance of a tenant representative, you will feel secure in having this professional with you along the way.
  • Maintain Order In The Leasing Process: With commercial real estate leasing, there are quite a bit of steps in the process. The tenant representative knows how the procedure goes and will help to maintain order along the way. This guidance is especially important for the tenant who may not be as experienced with commercial leasing as is the landlord, who probably has gone through quite a few commercial real estate transactions in the past.

Going into a business transaction such as a commercial real estate lease without a tenant representative is simply not a good business move to make. In order to make your next lease agreement as favorable as possible and get the office space you desire, make sure that your tenant representative is present there with you.

Suburban Office Space

Suburban Chicago Office Space: Tenant Improvements

by with No Comment Uncategorized

Suburban Office Space

Chicago suburb business owners who are looking for that ideal office space often find what they are looking for in an office setting. However, there are certain times when the suburban Chicago office space may not be exactly what the office space tenant needs in a commercial office.  Fortunately, landlords will usually allow specific tenant improvements to take place so that the office tenant is 100% satisfied with the office space end result. Here is what to expect in tenant improvements in the suburban office space:

Landlords May Not Allow Every Desired Tenant Improvement

When you want to add certain amenities and additions to a leased office space in the Chicago suburbs, you may know exactly what you want. Keep in mind, however, that your landlord may not allow every type of tenant improvement in their premises. After all, the landlord still owns the building and you are simply leasing it for awhile. Therefore, it is reasonable that there will be certain tenant improvements which won’t be allowed. Make sure that you thoroughly discuss these tenant improvements with your landlord and have the results of the conversation in writing so that there is no miscommunication along the way.

Tenant Improvements Can Be Pricey

Depending on what type of Chicago suburban office space tenant improvements you wish to complete, the end result can be costly.  You should decide upfront what type of improvements you want to make and be sure that you will be able to afford the tenant improvements. Some landlords will pay for tenant improvements while others will allow such improvements but have the cost be the responsibility of the tenant alone.

Certain Leases Will Accommodate for Tenant Improvements

For the lucky suburban Chicago office space tenants, there may be a clause within the office space lease which states that the landlord will pay for certain tenant improvements. This will allow the tenant to get what they want out of the office space and not have to pay the cost for doing so. A good tenant representative will be able to negotiate with the landlord and have them add this desirable clause into the final lease.

Pre-Existing Condition Clauses May Exist

For those office tenants in the Chicago suburbs who complete tenant improvements, they may need to ultimately return the leased premises to its pre-existing condition once their lease is up. These pre-existing condition clauses in the lease safeguard the landlord and ensure that the property will look exactly as it did prior to the tenant improvements. This is always something which the tenant must consider before making big changes to the leased premises since returning the structure to its prior state may be costly in the end.

Tenant improvement clauses are beneficial for Chicago suburb office tenants who want to make changes to the property. The tenant should see if the landlord will pay for such changes and whether they will have to return the property to its former state once their lease term is up. All of these things should be clearly outlined in the lease for the benefit of all parties involved in the leasing agreement.

Office Space

Chicago Office Space: Green Costs and LEED Certification

by Uncategorized

Office Space

In today’s society, individuals and companies are doing what they can to preserve the environment. Simple tasks such as recycling, conserving energy and using environmentally friendly cleaners are some examples of ways in which we are trying to preserve the environment for future generations. With that said, there are also larger ways in which environmental paths are being taken. For example, companies are leasing property in an environmentally friendly manner so that they can keep environmental factors in mind when doing so. The main issue occurs, however, when prospective office building tenants review the increased amount of the lease price due to the building being a green one.

Green Costs

Although most people would enjoy pursuing green commercial options, the truth of the matter is that going green in a commercial environment can be a bit pricey. Even something as simple as using energy-efficient light bulbs will cost the tenant more in the long run. In addition, if the landlord chooses to offer green features to the office space lease, the rent itself may be increased to accommodate for such inclusions. With this in mind, it is important to note that green costs are well worth the expenditure, whether you are a commercial office space tenant or commercial property landlord.

LEED Certification

LEED certification, which stands for Leadership in Energy and Environmental Design, is a green building rating system. When new buildings are constructed, contractors who want to shoot for LEED certification build the offices with environmental factors per the LEED certification guidelines in mind. This can be a pricey venture for the building owners and may, in fact, trickle down to the commercial office tenants in the end due to a higher rent being charged by the commercial building landlord. However, building owners may opt for the LEED certification goals as they want to do whatever is possible for the environment and may want to draw in environmentally-conscious commercial tenants.

Deciding If Green Office Space Is Right for You

The benefits of leasing green office space are readily apparent. You will be doing your part, as an individual and business, to preserve the environment on a daily basis. Your landlord may handle most of the green upgrades or components but your rates may be a bit higher due to the green qualities of the building. In order to figure out if green costs and an office building with LEED certification is right for you, review the following factors and make your decision accordingly:

  • Business with the Environment in Mind: Do you want to operate your business and lease an office space with the environment in mind? Do you find that you were frustrated with the lack of environmentally friendly features in your prior office spaces? If so, then the green costs will be worth getting an office building to lease which has LEED certification.
  • Cost Factors: You must also ask yourself if you and your company can afford the green costs associated with environmentally friendly office building leases and offices with LEED certification. Even though the building is already built and has received such certification, keep in mind that the green costs may continue for you, the commercial office tenant. If this is still agreeable, then leasing a commercial office space with green characteristics is doable.

Leasing an office with environmental factors in mind is a socially responsible and morally beneficial thing for business owners to do. If you find that you can afford the green costs associated with doing so, then finding a green office space to lease is a wise decision to make.

chicago office space listings

Chicago Space: How Negotiable Is The Price Per Square Foot

by Uncategorized

chicago office space listings

Office space leasing rates will vary in the commercial real estate market. The exact price of the office space rental will depend on a number of different factors. Some of these considerations include size of the rental space, location, amenities included in the commercial office space, parking options and more. All of these factors come down to the set price per square foot. In the past, price per square foot in commercial leasing situations was pretty much set in stone. There was little flexibility in the price terms and the prospective commercial tenant would just have to take it or leave it. Today, this trend has changed a bit.

Commercial Office Space Leasing Has Decreased

Since the economy has been less than stellar in the past few years, the need for commercial office space has decreased as fewer individuals and companies had the money to embark on a new commercial office space lease. This can be good for negotiating deals with the price per square foot for commercial office space tenants. Since landlords are more eager to occupy their commercial properties, they may be more likely than not to negotiate a bit when it comes to the overall price per square foot that they are asking.

Commercial Landlords Are More Willing To Negotiate To Get Rentals

Commercial landlords are well aware of the fact that they are not doing as well as they were approximately 8-10 years ago in the commercial real estate arena. With this in mind, they know that they must negotiate or risk losing potential commercial tenants who will ultimately go on to another commercial landlord who is willing to negotiate price per square foot. Even though the commercial landlord may not be getting their asking price, they are gaining a new commercial tenant and know that they will receive money as a result of the lease agreement.

Ways to Make Price per Square Foot More Negotiable

If you find a commercial office space to lease and the landlord is not exactly pleased about negotiating on the price per square foot, there are ways in which you as a tenant can make the price more negotiable and ensure that the landlord will be more willing to negotiate on price per square foot. First, make sure you are not too demanding with regard to other aspects of the lease. Don’t ask for multiple inclusions to the lease agreement and the landlord will be more likely to appease you when it comes to negotiating as to price per square foot. Also, be mindful of the current commercial real estate market. If the market in your area is still in a less than favorable position, you can feel more confident knowing that the commercial landlord may just agree to your price per square foot negotiations.

Negotiating as to the price per square foot terms is not as fruitless as you may think it to be. Review the current market and ask your tenant representative for additional ways to aid you in your price per square foot negotiations.