When leasing office space, companies must recognize that less is more when it comes to maximizing cost savings. Avoid leasing excess space just because you’re offered a seemingly great rate per square foot.
If you’re leasing office space, finding the right space can be a challenge. Especially if you’re a cash-starved startup unfamiliar with the many ways to minimize rental overhead. This type of prospective tenant often thinks maximizing savings comes down to getting the best rate per square. Seems logical on the surface, right?
The problem with this mindset is far too many companies today end up with excess space. They or their tenant representative focus on finding or negotiating the best deal per square foot.
By doing this, they’re unknowingly losing leverage and control in negotiations. A landlord lowering the rate per square foot isn’t always the win it seems to be. Not if you end up with more office space than you need in a lesser building or location.
Know Your Needs Before Even Looking at an Office Space
Want to know how to cost-effectively lease office space? The planning stage is an all too often overlooked part. It all comes down to knowing your objectives and goals. Be sure to ask yourself these questions before you even start looking for a space.
- How many in-house employees do you have and what are your growth projections in the next 1 to 3 years?
- What’s your budget and cost parameters?
- What’s needed as far as parking for employees or visitors?
- How much should your office represent your brand and the workspace you hope to cultivate?
- Will your employees have desks or workspaces or work more freely throughout the office?
- Is there a need and/or room for both communal and private work areas?
- What are your technology requirements?
- What type of employees do you hope to attract?
By answering these questions, you’ll be able to paint a visual picture of exactly what you need and want. More importantly, you can better evaluate how much space you’ll need. A comprehensive space evaluation can be prepared to determine the preferred layout. You only want space you can justifiably find efficient use for.
Leverage This Knowledge for Significant Cost Savings
Landlords have limitations on how favorable of a rate they can offer. It doesn’t matter if it’s a tenant’s market, if they’re desperate, or you have the absolute best tenant representative working for you. Big and small businesses alike will save much more money by reducing unnecessary office space by 10 to 20% vs. getting a great deal per square foot on a space that’s too big.
Choose Quality of Space Over The Amount of Space
Companies sometimes make the mistake of picking a less than stellar space in a less than desirable location. They’ll be offered a better per square footage rate at an older building from a landlord desperate to occupy it. While the adaptive reuse of historic buildings is trending right now, a higher-quality office building will sometimes net more savings. Even if the rate per square foot is higher, newer office buildings are built with efficiency in mind. They’re more energy efficient and built to better accommodate modern technologies. This can significantly reduce utility bills and save on tenant improvement costs.
Just remember. Be prepared when looking at commercial office space to rent or lease. Know the type of space you want and how much you’ll need. This puts you in the driver’s seat in negotiations for leasing office space.