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How to Lease Office Space?

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How to Rent Office Space

Before you start looking for office space to rent it’s important that you first determine what you are looking for. What are your current & future needs and wants? How will you use the space? What will you use the space for? This can be a time consuming process however it’s the most important. While some mistakes can be corrected later on, leasing the wrong office space is sometimes impossible to repair.

Your office space is part of your company’s identity, image, and culture so it’s important that you consider the following:

  • Who will visit your office and what do you want them to think about it?
  • Where are your employees, customers, vendors, and talent pool?
  • What transportation options are available?
  • What type of layout will work best, open or one with hard-walled offices?
  • What amenities do you want in the office building and surrounding area?
Some of the things to consider are office property type, size, layout, and location.

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Office Property Type

Most businesses will rent office space in traditional office buildings, however some have shorter term needs, or have a retail or storage component that will necessitate a different type of space. For example:

Typical multi-story buildings with common area lobby, hallways, elevator, and bathrooms. Tenants will have their own private office with conference room and break area. Mostly used for professional service type businesses. Electric and janitorial services are typically included in the monthly rent.

Traditional office buildings are typically classified as A, B, or C which mainly refers to their physical attributes. Class A buildings are newer with amenities and higher end finishes, and are typically the most expensive. Class B are typically up to 20 years old with some amenities and well maintained. These are used by most professional office users. Class C are older (>20 years) with limited amenities and the least expensive. These are great for those on a budget such as non profit groups.

These are serviced offices offering shorter term leases typically found in traditional office buildings. A company like Regus or WeWork will rent entire floors or buildings then lease smaller rooms or workstations to businesses that don’t want a long term lease or a large space. They also offer additional services such as access to phone lines, internet, shared conference rooms & break areas, etc. Great for startups and freelancers who want flexible lease terms and networking opportunities, however may lack in privacy.

Some companies may have a need for office and warehouse space. Flex space evolved from converting light industrial warehouse space to office. Typically one story buildings found in semi-industrial areas with windows on the front. Flex offices are considered value space as rental rates are lower than traditional office space. Tenants are responsible for paying their own electric, janitorial (if needed), and hvac maintenance & repair. Great for those with warehousing, manufacturing, and assembly as well as office space needs.
This is the hot topic among technology & software companies who want cool looking spaces that make people go “Wow”. Creative offices commonly have open floor plans with high ceilings with a few offices and conference rooms. Rather than cubicles, cool looking workstations or desks are used. You also would see the break area being the focal point where free drinks and snacks are available. Creative offices are also typically colorful and playful with lots of glass, natural lighting, concrete floors, cool looking seating areas, and a game room. Building amenities such as fitness centers, deli’s, and within walking distance to restaurants and night-life are a bonus.

Office Space Size

The office square footage needed depends on a number of things such as your current and future headcount, office layout, building density clause, and the property’s parking ratio.

Most tech & software companies with open layouts average about 150 to 175 sf per person. Open layouts are those with a few offices, maybe a conference room or two, break area, and the rest left open for workstations. Obviously If they have a lot of other shared space (e.g. game room) that could increase.

If your company needs a lot of hardwalled offices expect to average about 175 to 250 sf per person. Professional service companies such as attorneys, accountants, engineers, etc commonly like a lot of hard walled offices and conference rooms. More rooms increase the square footage needed.

Building parking ratios commonly limit you to 3-4 parking spaces per 1,000 sf leased in the suburbs and 2-4 spaces per 1,000 sf in downtown areas depending on the market.

If your leasing office space in a suburban areas some buildings have more flexibility however depending on the city you lease office space expect that to be the general rule. If in a downtown area you typically have to pay for parking. The parking ratio may limit you in that building however you can always contract with other building garages.

Be aware of downtown office buildings that have density clauses. They can limit you to the number of people you can have in your space. In many downtown buildings you could have a ratio of 50 to 125 sf per person, however some downtown office buildings have a density clause. Why do office buildings have density clauses? Older buildings have to conserve their HVAC, energy, and elevator uses. If you have a ton of people in your space it would stress the mechanical systems. The newer buildings are equipped with state of the art systems so landlords don’t have to be as concerned.

Pro tip - Consider Hiring a Space Planner

If you want to save a ton of time and ensure that you don’t lease too much or too little space consider hiring and architect or space planner to do a test fit. That means you tell them about your company, culture, current and future headcount # of rooms, etc and they will help determine how many SF of office space you need. Once you have that it makes the process of finding the right space easier.

Office Building Location

When picking a location it’s important to think about the business needs

Cost

Office location can also affect the price per sf. Downtown office space costs more than offices in the suburbs. If you are on a tight budget then you might be limited to certain locations.

Professional Image

Building image may not matter to every business however attorneys, lawyers, and financial firms are image conscious which means they will only consider locations with the nicest buildings.

Office Building Infrastructure

Your office needs to be equipped to service your needs. Having the proper lighting, hvac, telecommunication or internet access is key. Find out what internet providers service the building. For example if your a software company and you have to have a Fiber lit building then you can only consider those because not every building has fiber going to it. Medical offices require accessibility. Not every building can accommodate your needs which is why it’s so important that you take the time to understand before searching for space.

Convenience

Is the location easy to find? How long are employee commute times? Pick a location that is easy to find for customers, partners, & vendors. Also it’s easier to retain and attract good talent if you have a great office location that can mitigate long commute times. Close to major freeways and airports would be nice.

Transportation

If any employees or customers use public transportation it would be a good idea to consider a location with a bus stop nearby.

Zoning

Before signing a lease check the zoning laws to ensure your business is allowed to operate in the location your considering. Most companies will be fine however some businesses (e.g. therapists) need to verify.

Amenities

What amenities are available in the local area? Are there restaurants, dry cleaners, or fitness centers close by? You don’t want your employees taking 2 hour lunches. Also they have day to day personal needs to take care of so being close to medical offices, etc will make their life much easier.