November 9, 2020

How to Lease Commercial Office Space

The term “commercial space” refers to any property that is not residential, ranging from garages and high-rise office buildings to medical centers. A great office lease can make business operations more productive, create a sense of professionalism and reliability for potential clients, and improve employee satisfaction. The area you choose could also make or break your bottom line regarding maintenance costs, network availability, and more. Starting the search early by consulting premier commercial real estate experts and having a broker on your side will help you find the right space.

When looking for help, the best real estate company for your business is one that knows the area, is familiar with office lease availability in your location, and will consider your needs to negotiate favorable office lease terms for your organization.

Ready to rent new office space? Here are some of the basics you will need to know, from the search process to the types of commercial leases you’re likely to encounter.

Identify Your Business’s Commercial Office Space Needs

When you start the process of finding office spaces, medical office space for lease, or other commercial properties, your best ally will be a realtor with broad local knowledge and extensive real estate experience. You will first need to investigate the type of office space available in your area because each location’s accessibility differs. For instance, Connecticut’s commercial realty options will be quite different from what you will find when searching commercial real estate in NY. Availability rapidly changes, so having a broker familiar with the area will help you narrow down your options.

If your business is growing quickly, you will be particularly concerned with finding a space your company can expand into. Not sure how much space you will need? Consider the number of workstations your employees will use and what type of support spaces such as reception areas, conference rooms, and training areas will be necessary for your operations, particularly the need for additional “circulation flow” to meet COVID-19 Standards. Our office space calculator is a great tool to start with.

The Most Common Commercial Office Space Lease

Every commercial lease is different and there are many intricacies in the commercial real estate market. That is why it is crucial to know the terms of the lease you are considering and have a broker who can help iron out a favorable agreement to provide you with the flexibility to expand, grow, and readjust in the following years. Getting help from an experienced real estate company means you will be secure with individuals who know how to make a smart decision while avoiding poorly negotiated deals.

Commercial real estate leases typically fall into one of three categories:

• The Gross Lease/Full-Service Lease. This type of lease covers the rent cost and utilities, maintenance, property taxes, etc. — everything a business needs to operate. While this lease can look particularly attractive to many business owners, they often include escalation clauses designed to account for increased costs over time.
• Net Lease. A net lease places all of the costs on the Tenant, including rate and a portion of the property taxes, maintenance fees, and insurance costs. In a single-tenant net lease property, the tenant could be responsible for the entire upkeep of the property, less the structural components.
• Modified Gross Lease. This type of lease is typically similar to a Gross or Full-Service Lease, however, there usually will be charges paid directly by the tenant (heat, electric, etc) and usually a provision whereas the tenant pays their increased share of costs associated with increased property taxes, maintenance, building insurance, etc.

The exact terms of each of these lease types will vary, especially if you opt for a net lease or modified gross lease agreement. Ensure you know what to expect if and when you need to expand to accommodate growth and change in the next few years. Now is the time to jot down your concerns and development plans and talk to your broker about them as you consider your options.

Commercial Office Space Tenant Representation with RakowGroup

Rakow Commercial Realty Group is well-suited to represent tenants searching for commercial office space and other property types in New York, Connecticut, and New Jersey. Most business executives aren’t as experienced in this industry as commercial real estate agents, so it is smart to work with a broker whose full-time job is to stay up to date on available properties and the complexities of negotiating favorable leases for their tenants. When looking for new commercial office space to lease, or faced with renewing/renegotiating an existing lease, having a partner that understands your business will make that process easier.

RakowGroup professionals offer premier commercial realty services. Each agent comes to the table with extensive experience with the localities they represent. Unlike those at other commercial real estate firms, we understand each client’s specific needs as they explore their options to find the best properties. For more information on all commercial real estate services, contact us today!