Small Office Space for Rent in Overland Park, KS: 2 Questions to Address Before Signing A Lease
Getting ready to look for a new office space for lease in Olathe, KS, or moving into your first real office space? Before you start to make any commitments, step back and ask yourself these two questions to make sure you are looking at the right kind of space and lease, as suggested in “20 Things You Should Know About Leasing Small Office Space”:
#1 How much space do I need?
One of the first things to take into consideration is how much space your business will require, as too little or too much space can cause financial problems for your business down the line. Calculating square footage should be based on how much space you need now and what your growth expectations are for the upcoming lease term. Here are a few questions about staff and workspace to assess how much space you might need:
- How many employees do I currently have? Will I be adding more over the next few years?
- Exactly how much workspace do I need per employee? Is desk sharing an option?
- When do I plan to add staff, and about how many staff members would I want to bring on in the next few years?
- What kinds of staff do I have or plan to hire—administrative, sales, executive?
Having some concrete numbers to go off of when thinking about the amount of staff in your business can best help you determine how much space you need. On average, it is good to factor in about 150-350 SF per employee; however, the type of industry you are in can also be a big factor in this.
Different industries tend to choose different types of layouts for their offices. For example, a customer service call center might want workstations with groups of cubicles in more of an open office plan, whereas something like a law office is better suited to the traditional private office model.
Once you have determined how to arrange employees in your office, consider also what things you might want included in your space, such as a kitchen area, conference rooms, or a waiting room and reception area. As you get closer to choosing a space, you might also consider talking to an interior architect or a space planner for a second opinion.
#2 How Long of a lease should I sign?
Another thing you should determine early on is how long of a lease you are prepared to commit to. This depends largely on your budget, but also on your goals and expectations for your business in the coming years. To evaluate these factors as objectively as possible, sit down and make a 5-10 year plan for your business with detailed descriptions of budget, staff, how much space you will need, etc. The goal is to find a space that you can comfortably grow into but also afford, and you want to do your best to avoid moving if possible, since moving is an expense and a hassle for any business. If you are not sure where you will be in 5 years, talk to the landlord about renewal and expansion possibilities so that you have options at the end of your term. Here are a few pros and cons to consider when thinking about long versus short term leases:
Long Term Lease
- Pros: This type of lease is ideal for a company with a clear plan and predictable growth. It also allows a tenant to really invest in customizing a space, especially since landlords typically help with construction costs for long term occupants. It also means avoiding regular renewal negotiations, which can be costly and tiresome if a landlord knows that you do not want to leave the space.
- Cons: One major con is annual rent increases. Typically the yearly increases for a long term lease are based on the Consumer Price Index (CPI), which increases at about 3% per year—meaning that after 10 years you will be paying 30% more in rent. Regular market values rarely raise at this steady rate, so by committing to this measurement you are missing out on the opportunity to negotiate for a better rental rate.
Short Term Lease
- Pros: The biggest benefit of a short term lease is knowing you will be less likely to find yourself stuck in a place you cannot afford. A 2-3 year lease term with the option to renew or even to expand into adjacent space is the ideal situation for a small business not yet in a position to accurately predict the future.
- Cons: The downside of a short term lease is that there are not as many benefits for the tenant as there are in long term leases, for example, free rent periods, breaks on some expenses, or help with build-outs. The longer the term, the more financial concessions a tenant has the power to ask for.
Knowing how long of a lease to sign for a small office space for rent in Overland Park, KS, comes down to how sure you are about the trajectory of your business in the next few years and whether it is worth the risk of taking on a space that will be too big or too small. The more stable and predictable your business is, the longer the lease you should look for in order to reap all of the benefits offered to long term tenants.
Before you get too far into negotiations over any commercial real estate in Kansas City, step back and make 5-10 year plan for your business to decide how much space you should lease and how long of a lease you can commit to!