Finding an office space to rent for your growing business means opening a new chapter in your future. While the real estate market has been improving recently, there are still some advantages that tenants can leverage in negotiations, and the best way to obtain these advantages is to be prepared. Here are a few negotiation tips to consider, as outlined in the article “How to negotiate your first office lease”:
#1 The Lease Term
One of the most important elements of a lease is deciding the lease term. A stable business should consider a longer lease if possible, because landlords prefer these long-term leases and it will give you a little more leverage in negotiations. However, if you are just starting out, you may not want to commit to a long lease because new businesses typically need some flexibility while their trajectory is still uncertain. Unfortunately, most landlords prefer multiple year leases, so this does lower your negotiating leverage and might prevent a landlord from agreeing to certain requests, for example, improvements to the space. But fear not, there are landlords out there willing to offer short term leases, so be sure to look for those and try to find as many options as you can in order to compare.
#2 Evaluate Your Requirements
Before you start seriously looking at spaces, it is important to have an outline of what kind of office space you want for your business. How many private offices do you want? Do you need break rooms or a kitchen area? Conference rooms? What kind of office design are you envisioning – will desks be in a traditional office layout or a more innovative arrangement? There are pros and cons to both of those office layout options: traditional cubicle setups are more cost-effective, but more open spaces are becoming popular as a way to promote creativity and give an office a modern feel. Other things to consider when coming up with your office space layout is what kind of customer or client interactions you have, and how much privacy is needed.
#3 Study the Market
Do some real research on what is out there before you settle on a single space. A good way to really get a grasp on the market is to work with a professional. Even if you feel like you can find a space yourself, it is helpful to have a real estate broker to assist you in navigating all of the lease terms, clauses, fees, etc. Bear in mind that tenant’s brokers are paid by landlords, so bringing your own representation to the table might help you get the best deal possible.
#4 Work for Favorable Terms
Take nothing at face value, particularly the rental rate of a space. One thing to ask for if you are looking for a longer lease term is a few months of free rent, which lowers the overall costs for you but allows the landlord to still charge the listed rental rate. Also talk to the landlord about allowances for improving or customizing the space. Finally, ask about what options your business has if you grow rapidly during the term of your lease and need more space – for example, can you expand into another space on the property.
As a small business owner, it is important to enter the search for a rental space with an idea of the overall process and what you can do to get the best deal possible.