5 Things to Expect When Leasing Office Space for Your Startup

rnLeasing office space is one of the costs that every business must incur. Prior to heading out to lease office space, you need to remember that the location of your business will be one of the key determinants of its overall success. If your business serves walk-in clients, you need to ensure that the location chosen is accessible by your clients and customers. If you are into manufacturing, you need to ensure that your factory is located close to the source or raw materials as well as close to the markets. Regardless of the core activities of your business, here are five things you should expect when leasing space for your startup: Pricing Models Different landlords structure their lease rates differently. The common lease rates include Triple Net (NNN), gross lease and modified gross. If the lease is triple net, expect to pay lower base rent for the office space but be ready to pay for all the additional expenses. In gross lease, the rent is inclusive of all operational expense while modified gross is a blend between Triple Net and gross lease. Pick a pricing model that works for you. The Lease This is a very important document. You will be expected to sign it as a show of commitment to rent the office space. Remember leases are negotiable and you should negotiate before signing them. You stand a better chance of getting the best deal by entrusting the negotiations to a professional firm such as Hartman Income REIT. By so doing, you stand a chance of getting the best commercial leasing rates. Personal Guarantee The landlord must protect his or her interest in the property and ensure that there is a way through which rent will be paid regardless of your business performance. This is why the landlord will require that you provide a personal guarantee. The guarantor will shoulder the burden of paying rent when you are unable to. Room for Expansion Since leases commit a lot of capital for a substantial amount of time, you need to ensure the space leased will allow for future expansion. You need to consider your vision for growth and pick an office space which has some adjacent space that you can lease as and when your business expands. Lease Term Landlords can offer you short-term or long-term leases depending on your preference. If you are confident of the direction your business is taking, you should consider signing a long-term lease. Before heading out to hire an office space, make sure that you have done your due diligence and researched on the five points discussed above. Ensure that you have the personal guarantee ready and if you need the help of a commercial lease agent to help with negotiations for the lease, you shouldn’t hesitate to hire a good one.