An office lease is one of the most expensive contracts a small company will negotiate. In this market, how much you pay is not nearly as important as how you negotiated it. As the owner of a small company, the pressure can make a successful negotiation for your first lease seem impossible. A bad lease agreement could endanger your company’s survival. With a few tips, you can get negotiate a strong agreement in your favor though. The following tips will show you how to negotiate your office space rental lease agreement.
Find Your Leverage
In your negotiation, make sure you have leverage over the landlord. This involves researching the property you want to lease and looking for advantages. Determine if there are other companies interested in the space or how long the space has been free. Knowing these factors can let you pressure the landlord for favorable terms if they’re desperate to rent the property. On the other side, make sure the landlord knows that you have other comparable options. If they know your desperate for the space, or if the space is exclusive for your purposes, they may demand more in rent. A good negotiation is all about information. If you go into the negotiation knowing the other party’s weaknesses, you can leverage a better deal.
Focus On Term of Lease
Getting a good length of term for the lease should be your main goal in negotiation. Getting a low rate is good, but term is more important in case you want to move corporate offices later on. If your term of lease is matched to your company’s needs, it will save you a great deal of money over time. Make sure that your term doesn’t extend beyond when you can use the space. In determining term, you need to realistically consider the future of your company. The best way to protect the term of the lease is to make sure the agreement has a right to leave. Concentrating on the term of the lease will protect you from having to pay rent if your company collapses or if you need to expand into a bigger office.
Look For Hidden Costs
The Landlord will try to find ways to hide fees in the agreement. As a result, make sure you read the agreement carefully and identify them. A common hidden fee is maintenance costs. Insist that there are dollar caps on any maintenance costs your expected to cover. Similarly, you might find office space for rent NYC that comes with housekeeping and maintenance included. You could have additional fees for reception, shared conference rooms or internet access. When possible, try to insist on a gross lease, which will prevent the landlord from charging these other fees. By the end of the negotiation, all costs should have been discussed so that you can sign the agreement confidently.
Check The Condition Of The Property
During the negotiation, determine the condition of the property and who’s responsible for needed repairs. It’s important to avoid a deal where the landlord rents you the property “as-is.” Even if the property looks clean and up to date, you should have all of the workspace options checked. If property has code violations or other problems, they can become your responsibility depending on the terms of the lease agreement. Discuss needed renovation in the negotiations. If possible, acquire an incentive or allowance from them for the renovation.
Have The Agreement Reviewed
After a deal is struck, make sure you have a lawyer look it over before you sign. Even if you employed a broker to help in the negotiations, it’s good to have a real estate lawyer check it. Brokers are working on commission. As a result, they many not necessarily act in your best interest towards the end of the deal. A real estate attorney can ensure that your lease agreement is written fairly for you as a tenant. Regardless of your skill at the negotiating table, you’ll benefit from having an expert check your work.
Negotiating your first office rental lease agreement can seem difficult. With a few tips, it can be manageable though. Do research on the property and find leverage on the landlord. Focus on the term of the lease, not solely on the rate. Look for hidden costs hidden in the agreement. Plan to discuss the condition of the property. Once an agreement is reached, have it reviewed by a real estate lawyer. With these tips you can negotiate a new lease without fear of a bad deal.