6 Tips For Leasing Office Space: Part 6
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, Part 4, or Part 5 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.
Nate Bargatze (one of my favorite comedians) tells a story about doing a USO Tour in South America where there are many deadly snakes. His military escort told him if he ever gets bitten, he should catch the snake and take it to the doctors to determine how deadly it is. To paraphrase his reaction, he says, “whose suggestion was that?! Did the snake tell you to say that?!”. It seems a little counterintuitive to attempt to catch a snake that has already successfully bitten you.
Some business owners don’t realize that when they call a “For Lease” sign in front of an office building, that person’s only job is to sell you on that specific building. It will either be the Landlord (who wants the highest possible rent) or the Landlord’s broker (whose job is to help the Landlord get the highest possible rent). Of course, most Landlords and brokers are ethical and not out to gouge uninformed office tenants. With that said, they have a fiduciary duty to the Landlord so it is NOT their job to get you a good deal or tell you about a cheaper building across the street. They may cordially answer questions and meet you at the suite to tour, but do not mistake their helpfulness for an obligation to represent you equally. Although dual representation is legal when disclosed, do you believe the broker (who worked with the Landlord for 5 years) will give equal loyalty to a tenant he met 3 weeks ago?
When you drive around calling For Lease signs, you are inviting a half dozen brokers to badger you with phone calls pushing their specific buildings. Alternatively, you can hire a free Tenant Representation Broker (just for fun, let’s say Carlsen O’Connell) to be a single point of contact and provide an unbiased opinion on all the office space in town. In this scenario, the Tenant Representation Broker works for you, not the Landlord. The only thing you have to lose is all the headache and time suck that goes into running your own office search.
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.