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Negotiating Your Office Lease


Few things are more important to your company’s productivity than the space in which you work. If your company has outgrown its current office space but isn’t yet ready to acquire a property of its own, it’s important to have a careful strategy as you prepare to lease your next office. Getting the best office for your staff and the best lease agreement for your budget all come down to one thing: negotiation. As you prepare to discuss an office lease with a landlord, follow these tips to help you get the terms that are right for your company.

Have Options
Keep a list of suitable office spaces as potential fallbacks in case your current negotiation falls through. Not being tied to one option can give you much more freedom and may motivate the landlord to offer better terms. New spaces are listed every day, so stay on the lookout for something else that might be a good fit.

Know Your Costs

The cost of office space isn’t simply a multiple of your monthly rent. When you review the lease, look for additional costs like these and factor them into your decision:
  • Annual rent increases
  • Rising taxes (if it’s a triple net lease)
  • Property management, utilities, and janitorial services
  • Maintenance of the building and surrounding grounds
  • Occupancy expenses such as new furniture or remodeling

Look for Landlord Concessions
Sometimes, a concession from the landlord can be more helpful than a slightly lower cost per square foot. The following common concessions may be especially valuable:
  • Landlord fit-outs to customize the space for your company
  • A month or more of free rent
  • Permission to sublease your space, giving you greater flexibility as you grow

Think About the End of the Lease
Steadily rising rents can cause an unpleasant surprise when office tenants get ready to renew their lease. In case you want to stay in the office after your lease is up, be sure to ask the landlord for a renewal clause with language that limits your rent increase.

Get Expert Help
Determining a fair price for office space can be more complicated than it is for homes. It’s important to rely on a knowledgeable broker for up-to-date information about your market as well as for guidance during negotiation. Also, your real estate attorney should review the lease before you commit.

Buying Instead of Leasing
While this option comes with a down payment, it can also offer greater stability, more control over the property’s use, and a valuable investment opportunity in the long run. If your company is ready to buy, Sun National Bank’s experienced lenders can help structure a commercial real estate loan tailored to your budget and cash flow needs. Take advantage of today’s low rates!

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The information contained herein is for general informational purposes only and does not constitute tax, legal, or business advice.