7 questions you should ask before leasing office space

Most business owners and managers are experts in the fields they’ve chosen — not in commercial real estate. When it’s time to find new office space, it’s normal to not know what to look for. To get you started, here are seven questions office building tenants should ask prior to committing to

a long term lease for space. Remember, too, that help from a commercial real estate specialist is always just a phone call away.


1. Is the building’s floor plan flexible and efficient?

To cut costs, it’s important to find a floor plan that accommodates your needs in as little space as possible. Consider things like interior walls, columns, and mechanical systems as well as corridor and closet versus office space. Because construction techniques have come so far, buildings constructed within the last decade or so tend to be more efficient than older buildings are.


2. What is the load factor?

As a tenant you will pay for your share of the building’s common area, including the elevator lobby, corridors, and restrooms. This is expressed as load factor (percentage). The higher the percentage, the more inefficient the building design is. Inefficiency costs you money in terms of higher rent per usable square foot. The entire concept of usable versus rentable space can be very confusing and potentially expensive.


3. Does the space have adequate heating and cooling?

Older or cheaply designed buildings may not be as operationally efficient as desired. Be especially careful of moving into previously occupied space that you have had remodeled. Be insistent the HVAC system is redistributed and re-engineered to ensure your newly constructed offices have adequate heating and cooling. This is a common complaint of office tenants. Once you have accepted the space and moved in it is too late to change.


4. What is the tenant improvement allowance?

Most spaces will need some level of improvement or remodel in advance of moving in. Be sure to understand the cost to do the work you need and also the time required to complete the jobs in advance of signing a lease. These days, the cost rises every day and every contractor is busy. You’ll want to make sure the landlord’s allowance will cover the work and that you can move in on time.


5. How many parking spaces does the building have?

Ask what the actual number of parking spaces is (expressed as a ratio to occupied square footage for the building. Most office tenants will need in the neighborhood of 4 parking spaces for 1,000 square feet of space. Know who the other building tenants will be. If the building has other tenants
who abuse parking, you could be negatively affected. Should you feel the parking situation is being abused you may complain to the landlord, but typical lease provisions will not provide the opportunity to terminate the lease due to parking problems.


6. What services are available?

What common services are available in the building? Security? Access after hours? Fiber? Also, are there any shared conference rooms and is there an inviting lobby or courtyard? With low
unemployment, a positive work atmosphere is important in hiring and retaining talent.


7. What are the building’s operating expenses?

Lease rate includes first year building operating expenses such as utilities, janitorial services, real estate taxes, building maintenance and repair. Typically buildings will cost more to operate after the first year. As these costs increase you will be responsible for a prorated share of the increases referred to as “pass throughs.” Over a 3-5 year lease, these can grow to large, expensive amounts. Consider auditing the invoices you receive in later years for accuracy.


These are only a few questions an office building tenant needs to ask. An experienced commercial real estate broker specializing in representing office building tenants can help your company avoid common landmines and pitfalls.

For more information on leasing new facilities, please contact Tenant Realty Advisors in Boise at (208) 333-7050

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