First Steps: Questions to ask internally before making your first call

Lease Term: It’s important that anyone assisting you with a space search understand your preference as to length of lease term you are hoping to commit to. For example, if you were to tell them you wanted a six-month lease, they might suggest you consider executive office suites. Most cities have multiple options for this type of space. While the per square foot cost is a premium to traditional office space, it is often furnished and can include a host of services, including phone, internet, faxing/scanning and meeting space/conference room areas. If you truly think you might only be in an office space for six months or so, you will find that executive office suites will be less expensive once you spread the costs of furniture purchase/installation, cabling, phone setup, etc. over such a short period of time. Most brokers can give you introductions to one or more executive office suite locations. The office suite company will typically pay them a small referral fee for making the introduction. The larger motivation for the broker, however, will be the hopes of working with you on a larger office lease in the future. A more typical “short” term would be three years. Even this length would typically require you to find a space that had an existing layout that largely met what you are looking for. The building owner is unlikely to make significant alterations to the space for this length of term. With lease terms of five years or longer, the owner will generally be willing to make significant contributions to “Tenant Improvements”, in some cases completely rebuilding the space at their cost (“turnkey”). If you are willing (and even prefer) to commit to a longterm lease and significant improvements are not required, you should expect to have some portion of the savings reflected in reduced rent.

Commencement Date: For companies who have not been through the process before, the most surprising part is how long it can take. Now, executive office space leases or as-is leases between two motivated parties can happen very quickly. But heavily negotiated bases with significant improvements can take four months or more.

Excerpt from our Practical Guide to Leasing Office Space.

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