For Subscribers

What to Look for When Renting Office Space Choosing a space for your business is a big decision, especially for startups. Here are the things you should consider because signing a lease.

By Christopher Hann

Opinions expressed by Entrepreneur contributors are their own.

Jason Lee

Q: What should entrepreneurs look for when renting an office?

A: Choosing a space for your business is a huge decision, especially for startups. There's much to consider, from hiring a real-estate broker to finding the right location to fine-tooth-combing through the lease.

Bill Armstrong, treasurer of the National Association of Realtors, who has toiled for 30 years in just about every aspect of commercial real estate, advises finding a broker who is experienced in commercial real estate and familiar with the pertinent geography."You have to interview, if you will, a broker, and have a sense of comfort with his competency," Armstrong says."I think you can meet with them and find out what they know in really short order."

OK, time to find your office. First determine how much space is necessary for you to operate. Armstrong cautions: Be realistic. If you lease more space than your business requires, your monthly rent could consume an excessive chunk of your precious resources. If you're a startup, you'll want to account for future growth. But how much? Be thrifty.

"Don't take on more space than you need," Armstrong says."That's critical."

Once you've determined the square footage your business requires and homed in on a space to match, figure out whether the existing layout suits your needs. If it doesn't, you may want to embark on what's known as tenant improvement, or TI. If your desired space requires extensive renovations, find out whether the landlord will contribute to those costs."This is another big thing," Armstrong says."The entrepreneur needs to say, 'What kind of help can I expect with respect to TI?'"

Armstrong says landlords generally are more willing to share TI costs when a tenant has agreed to a long-term lease. If you've signed on for only a year or two, you may be on your own.

About that lease--it's a mighty important document. Be sure you know the meaning of every syllable. Armstrong says it's imperative that the lease protects your interests. Consider hiring a real-estate lawyer to review it.

As you peruse the lease, Armstrong says, watch for costs beyond your per-square-foot rental price, such as utilities and common area maintenance (CAM) fees, which cover the expense to maintain the building--cleaning hallways and restrooms, removing snow, keeping up the landscaping. If you're not sure whether the rental price covers CAM or utility costs, by all means, ask.

After all, the terms of your lease are just as important as your rent."I may need, in a year or two years, to double my space," Armstrong says."I might want a one-year lease with a three-year option or a five-year option. If I need to grow, I need the ability to come out of there without a long-term commitment."

Christopher Hann

Entrepreneur Contributor

Christopher Hann is a freelance writer in Lebanon Township, N.J., and an adjunct professor of journalism at Rutgers University.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Culture

A Slack Channel or Meditation App Won't Fix Mental Health — Here's How to Lead Like It Matters

Mental health should be treated as a core component of your company's infrastructure, not an afterthought or perk. Neglecting it leads to diminished productivity, burnout and high employee turnover.

Business News

'The Decade of Autonomous Vehicles': Nvidia CEO Predicts Major Growth in Robotics, Self-Driving Cars

At the VivaTech conference in Paris this week, Nvidia revealed its autonomous vehicle development platform for automakers to build self-driving cars.

Business News

Shaquille O'Neal Is Settling the FTX Class Action Lawsuit Filed Against Him By Investors. Here's How Much He'll Pay Out.

NBA Hall of Famer Shaq is settling a class action lawsuit brought by FTX investors who claim they were misled.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Leadership

As a Leader, You Set the Tone — Here's Why Staying Calm Builds a Stronger Business

One thing I know unequivocally is that your mindset as a leader directly impacts your entire organization.

Business News

Deloitte Is Reimbursing Employees Up to $1,000 — For Buying Lego Sets

Each Deloitte employee can spend up to $1,000 on items to improve their well-being.