6 Tips For Leasing Office Space: Part 3
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!
If you haven’t already, check out Part 1 and Part 2 of this post for our best recommendations for leasing office space in the Sacramento area. This is a multi-part series for 6 tips to consider BEFORE you sign your next office lease.
Tips #1 & #2 are pretty straightforward if you’ve been a 3 person CPA firm for 10 years and plan to be a 3 person CPA firm for the next 10 years. Companies that are unsure about their growth are faced with a more difficult estimation. It’s like trying to buy a T-shirt for your 15-year-old nephew. He has a terrible scraggly mustache coming in, but he hasn’t hit his growth spurt yet. His Dad is 6’5” and his Mom is 5’1” so it’s difficult to pinpoint how big he’ll be in 8 months. All you can do is take your best guess.
Guesstimating office space for a growing company is just like that. Except for less scraggly mustaches. Probably. In situations where you truly aren’t sure what your employee count will be in a few years, your best bet is to lease office space in a large “multi-tenant” office building. In large projects with many tenants, there are always companies coming and going, growing and shrinking. This creates an opportunity for your company in the event you outgrow your office space in the middle of your lease.
Most Landlords will work with their tenants when they need to grow and move you to a larger space. They are not obligated to accommodate your growth, but if your growth puts extra rent in their pocket, they will do their best to make it happen.
Tenant: “Excuse me, Mr. Landlord. Would you be interested in additional rent from one of your best tenants that outgrew their space?”.
Mr. Landlord: “Why yes. I’m such a generous Landlord I will gladly help you with your problem. You’re welcome.”
The key is your Landlord must have extra space for you to grow into. If you are one of two tenants in a small building, they are not likely (or even able) to push out the other tenant for your growth. When you move into an office building, consider your long-term options in the event of growth.
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.