Before you take the leap of signing a lease for commercial property in Overland Park, KS, the biggest question you should ask yourself is whether your business is financially prepared for this commitment. This means more than just being able to pay monthly rent, because there are so many more costs associated with commercial office space for rent in Overland Park, KS. Here are some hidden costs to be prepared for, as described in the article “Worried About Hidden Office Space Costs?”:
- Rent Increases. Most leases for Kansas office space for rent stipulate that the landlord can increase rent annually as their operating expenses rise. These expenses cover things like maintaining the building, labor and materials costs, etc. It is important to avoid this sneaky clause from being a financial nightmare by negotiating so that the landlord can’t raise your rent over a certain percentage each year, or has to base the increases on an objective market index.
- Taxes. Some leases require tenants to pay property taxes each year. If this is the case for your lease, double check that the percentage you are paying is in proportion to the amount of space you are renting in the building, and not more.
- Pre-existing Condition Clauses. Look carefully for this clause in your lease, which states that your office has to be returned to its original condition when you move out. This means that if you made any improvements or additions to a space – walls, lighting, paint, etc. – you might have to remove or reverse those changes, which could be an expensive undertaking.
- Maintenance. Building maintenance costs are passed along to all tenants in some way or another, whether it is built into the rental rate or is an additional monthly fee. Make sure you know what these costs are upfront and build them into your monthly budget.
- Improvements. While you might have control over optional improvements, some upgrades you might be required to pay for – like a new sprinkler system or parking lot accommodations that meet the standards of the Americans with Disabilities Act.
- Electricity. Some landlords conduct yearly electrical surveys to get an exact number for how much electricity your office uses, and then use this to determine how much to charge you for electricity. However, some firms who provide this surveying service base the measurement on what your office would consume if all of your equipment was operating at full capacity. This kind of measurement results in inflated numbers and unexpected costs.
While these are some of the things that could sneak up on your business’s budget, fortunately there are also some ways to save money in the leasing process without cutting corners. Here are some tips to keep in mind, as outlined in the article “8 Ways to Reduce Costs when Finding an Office Space”:
- Evaluate lease length options. Lease length is always a tricky aspect of negotiations and can have huge financial implications. The ideal situation is a shorter lease for new businesses, but try to give yourself a lot of options. Do you have an option to renew? What about subleasing or assigning the space? Ask a landlord these questions ahead of time, and factor the answers into your comparisons between spaces.
- Create competition in negotiations. A little bit of competition between different landlords is a good way to raise the stakes in your negotiations and potentially get a better deal – whether you are negotiating a lease for the first time or re-negotiating your current lease. Let potential landlords know that you are looking into different options, but be careful not to reveal too many specifics.
- Give yourself time to look. You never want your negotiations to be rushed by the impending deadline of an expiring lease. Give yourself plenty of time to search for new spaces – at least six months for small businesses and even more for larger ones.
- Plan your space. Don’t wait until after you move in to think about what your ideal space design is. Thinking only in terms of square footage can be counterproductive if a space can’t be used efficiently to meet your business’s needs, so the current layout of a space and the usable square footage should also factor into your comparisons.
- Assemble your own teams. Brokers, attorneys, architects and other professionals should all be picked by you so that you know that they are working solely for your business’s interests.
- Negotiate for flexibility. A general good rule of thumb is to build in some room for flexibility and unknowns into your lease. Business can go up and down, and there are other extreme factors to think about that are beyond your control, like a natural disaster or the condemnation of the building. Build yourself an exit strategy if you can, and try to minimize the damage to your finances in any given situation.
- Remember improvements. If you know you want to do some construction or a build out on a space, that should be factored into your bottom line moving cost as you are comparing spaces. Start seeking out competitive bids from contractors ahead of time so you can really see what you will be getting for a space.
- Look at the big picture. Your costs and benefits in a lease encompass much more than your monthly rent. Think about other incentives a landlord offers, such as help with build outs or improvements, breaks on rent, or allowances for relocation, as well as any costs not directly covered by rent – maintenance, taxes, etc.
Renting a new office space is a big financial commitment for a business, especially a small business. Find out in advance what all of your costs are going to be, and be proactive about ways to save a little money without sacrificing what’s important to your business. Seek help where you need it – a good broker or a trusted contractor can be an invaluable ally.
Is your business interested in an office space for lease Overland Park, KS? Give us a call at 913-685-4100 to find out more about our available office spaces for rent Overland Park, KS, and even set up a tour!