If you’re looking for office space for rent in Overland Park, there is bad news and good news: there is no standard commercial lease. This is bad aspect of this means that there is no standard blueprint for you to follow, and thus some room for error. But the good thing is that a savvy negotiator can use this flexibility to their advantage to get an even better deal for their business, and the key to being this kind of negotiator is knowing where you can push for better terms. Negotiation is expected when leasing Kansas City office space for rent, and here are some areas where you absolutely should negotiate for the best possible deal, as suggested in the article “Negotiating a Lease for Commercial Real Estate”:
#1 Lease Length
This is an aspect of the lease that could have huge financial consequences, especially for a new business. There is a balance to keep in mind with lease length: on the one hand, shorter term leases mean more flexibility for businesses in the event that a business outgrows a space or finds itself unable to pay rent. On the other hand, a longer term lease usually comes with more concessions from a landlord, because landlords don’t want to go through the expense and hassle of re-renting a space every few years. Go for longer if you are confident your business will be able to pay rent for the term, but if you are unsure, try to negotiate for a short lease term with option to renew.
The most basic calculation of rent is multiplying the cost per square foot by the square footage of the space, and then dividing that number by 12 to get the monthly rental rate. However, monthly rent really varies depending on the type of lease your landlord is offering. Here are some different possibilities:
- Gross Lease – Costs like utilities, taxes, maintenance, and insurance are all factored into the monthly rental rate. Because of this, the monthly rental rate will be higher, but you as the tenant will pay the same amount each month.
- Net lease – Opposite of a gross lease, the tenant is responsible for utilities, taxes, insurance, and repairs in addition to rent. This means that instead of a flat monthly rate, the expenses may vary, which is a good opportunity to potentially save some money, but also more difficult to budget for. There are variations on the net lease (the double and tripe net leases), in which the different elements the tenant pays for (utilities, repairs, etc.) varies.
Make sure you know what kind of lease you are getting into, and whether things like common area maintenance and other fees are included in your monthly rate. You might also think about which lease would be better for your business’s budgeting needs as you are looking at and comparing spaces.
You might be able to negotiate rent depending on the location of the property and the current market conditions, but if nothing else you should address rent increases in your negotiations. Most landlords have an annual rent increase clause in their lease, and depending on the length of your lease, you could ask for a grace period from this or negotiate a cap on the percentage increase each year.
#3 Exit Strategies
For new businesses in particular, this is an essential leasing issue to address. Since it will be hard to get out of a lease outright without incurring serious penalties, your best bet is to ask for subleasing and assignment options.
Subleasing means that you can sublease some or all of your space to another tenant – though you will still be the responsible party for the lease and your choice of tenant will probably be subject to the landlord’s approval. In an assignment situation, you would be able to transfer the terms of the lease entirely to a new tenant. These two options are a good compromise, because they can save your business from dire financial straits, and save the landlord from rushing to find a new tenant.
#4 Permitted Use Clause
This seemingly small detail is also good to keep in mind if you are pushing for a subleasing option. The permitted use clause describes what is allowed in a space, and you want to make these terms as broad as possible to cover any potential expansions in your own business or subleasing tenants.
#5 Build-outs & Improvements
You might have to make some changes to a space to tailor it to your business’s needs – or even simply to make it functional. This is a great place to negotiate who is responsible for what kinds of improvements or renovations – both in terms of paying for the changes and overseeing them. You might be able to get a landlord to give you a build out allowance, especially if you are willing to sign a longer lease. Make sure you also address whether the space needs to be returned to its original condition when you move out, as this will be an expense to your business if that’s the case.
Remember as you enter the commercial leasing process that there is a lot of room for negotiation. Don’t be afraid to push for more favorable terms when you rent office space in Overland Park, but also think about where you can compromise so there is some give and take.
Interested in office space for lease Overland Park, KS? Give one of our commercial real estate brokers a call today at 913-685-4100 to find out more about our available office spaces for rent Overland Park, KS!