Avoid These 6 Mistakes When Leasing Office Space
Posted in Office Space Rental on October 24, 2014
If you’ve never leased office space before – or even if you have – you’re bound to make at least one mistake. Rest easy, such mistakes rarely break the bank. Yet it’s still far better to not make them.
Read below for six mistakes many tenants make when leasing office space.
1. Perhaps the top mistake potential tenants make is not having a clear business and real estate goal as well as plan for the space. In other words, it’s important that you know clearly the why of the lease and the what: why are you leasing a space and what do you hope to get out of it? Do you work at home mostly and are tired of being interrupted by family members and so you’ve decided you need a dedicated office space where they can’t – easily – get a hold of you? What will you do if it does – or doesn’t – work out for you? Are you planning on leasing a larger space for a while before buying or building a larger space in order to see if you actually need a bigger space? Remember, know why and what first. The type of space you rent will follow from that.
2. Many tenants don’t have a budget. And when we mean budget, we mean that they don’t take into consideration the cost (as applicable) of utilities, parking, and other amenities an office may – or may not – have. Instead, too many potential tenants fall in love with a space and figure the price is in their ballpark (or they’ll figure out a way to pay for it somehow) and sign on the dotted line.
3. Seriously consider having a professional representing you in your negotiations. A good tenant broker knows all the nitty gritty of the leasing process and can look out for your best interests, finding obstacles – and overcoming them – that you never anticipated. You also should have a good attorney in your pocket to help you weave your way through the commercial real estate leasing process.
4. Don’t make the mistake of not reading everything you’re going to sign. And make sure you read it thoroughly. You’re going to be signing a ton of legal documents. Know them well. (Or at the very least make sure your tenant representative/attorney can explain them to you. You still should read them thoroughly, however; it’s your signature on the forms, not the rep’s/lawyer’s.)
5. Don’t forget to compare deposit and first/last month’s costs with other spaces. In other words, make sure you see what’s out there and what they cost before leasing a space. If you don’t know what the competition is offering, you may end up paying through the nose for a space.
6. Never forget that you have negotiation power/leverage, too. Too many potential tenants think the landlord has all the power and so acquiesce easily to any and all “rules” or stipulations the landlord makes. Never forget to negotiate. Good tenants are hard to find and if you know that you’d be the type of tenant any landlord would be lucky to have, stand your ground when the landlord is balking at a must-have you won’t live without. Always, always, always, be ready to walk away; there are many other office spaces who would be happy to accommodate you.