6 Tips For Leasing Office Space: Part 5
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, Part 2, Part 3 or Part 4 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.
Let’s say it costs $1,000 a month to lease a Ferrari and you have a $1,000 per month auto expense budget. Is that your green light to sign the paperwork and floor that baby off the lot? Of course not. You need to budget for additional premium gas ($200 per month), increased auto insurance for a vehicle that is not designed to drive reasonably ($300 per month), and maintenance at the only shop in town that services Italian imports ($200 per month). You’ll also need to budget for chiropractor bills resulting from excessive nights sleeping on the couch based on your significant other’s disapproval of your Ferrari lease.
When it comes to leasing office space, you need a firm understanding of all the other expenses that aren’t stated in the base rent. Many office buildings, Landlords, and leases are different so you can’t assume your previous office expenses will be consistent. Some leases include your electricity. Some don’t include janitorial. Some include pass-through operating expense increases. Some require you to pay your pro-rata share of all building expenses (triple nets or CAMs). Some require you to sign away your first-born child. Some of you may willingly sign that away…
Not knowing what you don’t know can be stressful so Carlsen O’Connell Commercial Real Estate offers a free expense checklist for our clients. This allows you to meticulously add up your potential expenses and avoid unpleasant surprises after lease signing.
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.