6 Tips for Leasing Office Space: Buyers Guide To Budgeting Commercial Office in Sacramento - Carlsen O'Connell Commercial Real Estate

6 Tips for Leasing Office Space: Part 1

6 Tips for Leasing Office Space: Buyers Guide To Budgeting Your Commercial Office in Sacramento: Part 1

Office space is generally the second biggest business expense behind employee salaries.

Salary expenses can be decreased when needed, but office leases are typically locked in for 3 to 5 years.

Think of it as the Olympic Games: if you show up underprepared and unfocused, you’ll be stuck with that mediocre performance for the next 4 years.

And yes, I am comparing your reading a quick article about office leasing to the rigors of athletic training at the Olympic level.

You’re basically a 10-minute read away from a metaphorical business gold medal. Do it for America!

Here is Part 1 of the 6 things to consider BEFORE you sign your next office lease.

Tip #1 – Don’t Get Too Caught Up on Per Square Foot Prices

Have you ever eaten too many 100 calorie bags of cookies? As you open the first bag you think, “It’s only 100 calories so I’m making a healthy choice”. Unfortunately, the first bag seemed a little light (obviously a manufacturing issue) so you decide to open a second bag. Then you forget to count how many cookies were in the second bag which temporarily derails your scientific research. You open the third bag because the 11th-grade statistics class taught you about sample sizes and data from two bags isn’t significant. After three bags you fear your hunger has merely be awakened as opposed to satisfied so you move onto the fourth bag. Four small bags of cookies? That’s almost a meal. You might as well eat the fifth bag to officially make it a meal…

It is common for people to make the same mistake with office space. They get caught up on the per square foot rate (calories per bag) and forgot about the number of square feet (the number of bags). It’s easy to become obsessed with one building asking $1.75 per square foot (PSF) versus another building asking $1.90 PSF because of our brains like apples-to-apples comparisons.

With that said, very few office suites are the exact same size and layout.

Intuitively, we believe a $1.75 PSF building is cheaper than a $1.90 PSF building, but that doesn’t consider the main driver of office rent: square footage. Here is an example:

  • Building A: $1.75 PSF x 2,500 SF = $4,375 per month
  • Building B: $1.90 PSF x 2,000 SF = $3,800 per month

As you can tell in the example above, PSF rent is only significant if the square footages are very similar.

For Strategy & Expert Coaching in Leasing Office Space, Give Carlsen O’Connell a Call!

Overall, finding office space can be a time consuming, headache-inducing, and non-transparent at times. If this article helps one business owner avoid at least one potential pitfall, I’ll consider the entire process a success. Remember that your office lease negotiation comes around roughly as often as the Olympics so you need to prepare accordingly. With some strategy and expert coaching (give us a call!), you can be the Michael Phelps of office space leasing. We realize that’s a less exciting version of Michael Phelps, but you’re still on the podium.

Call Carlsen O’Connell To Help You Find an Office Space For Lease in the Greater Sacramento area! 


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