Demetree Real Estate Blog

5 Factors to Consider in Negotiating an Office Lease

[fa icon="calendar"] 03.05.2019 / by Demetree Real Estate Services


Leasing commercial property for your business is often costly and it is one of the biggest expenses a growing company can incur. However, by negotiating the best office space for lease, you can save a substantial amount of cash to allocate for other business expenses;  like launching a marketing campaign or hiring a few more employees.

Here are 5 important factors to consider when negotiating the best office lease for your startup.

1. Lease Contract

Read the lease contract in full with a business lawyer, so that he can inform and advise you of any clauses that are questionable or are not in the best interest of your business. Discuss with the landlord or management company any questions or issues regarding the contract.

2. Lease Period

Many commercial real estate owners or commercial leasing companies are willing to negotiate on the terms of the lease before signing. Nevertheless, if your company's needs change, you may find yourself locked into a lease that is no longer appropriate. Try to negotiate a shorter-term lease with the option to renew for a longer term once the initial lease ends.  Take note that the landlords enjoy financial benefits when they renew contracts with existing tenants. You may incur additional expenses for repairs when a tenant vacate the place, so take this opportunity for a successful negotiation.

3. Lease Cost and Increase

Review the cost of the commercial office space for lease, and find out whether it is on per square foot basis or the total cost for the property. If the cost is on a per square foot basis- that means the overall calculation of the total office space includes common areas such as public corridors, elevators, stairways, lobbies, restrooms, meeting rooms, etc. Inspect the property to see if it has common areas you can't use, and ask that the landlord to deduct it from the cost calculation. Look over the lease agreement for any clause concerning rent increase over the course of the lease, you can ask the landlord to add a clause to prevent unexpected increases.

4. Lease improvement

Your new office space may need some improvements or changes. Be aware that some leases don’t allow changes to the property, while other leases require landlord’s permission prior to remodeling or improvement. Find out beforehand what you are permitted to make. Ask for a supplementary clause specifying what is required to make changes if tenant improvements are not explicitly mentioned in the contract. Also, be aware of a clause that states, “The premises must be restored to its original condition at the end of the lease”.  

5. Commercial Space Broker

You might want to hire a commercial real estate broker to assist you in leasing commercial property. If a potential landlord isn’t easy to deal with and makes unreasonable requests during the lease process, a good broker can represent your company’s best interests. They will work with you and your lawyer throughout the lease negotiation. A broker can help provide a team that will work on behalf of your company should you need contractors, engineers, architects, furniture and equipment vendors, etc. for setting up your startup office space.  

Your ability to negotiate the best office lease for your startup depends on how much leverage you have. Do your homework -- find out if the commercial office space for rent has been unoccupied for a long time or other companies are considering the same office space.  Things like these can make the difference between you taking control throughout the lease negotiations or a landlord insisting his/her own terms.

Let Us Help You Find The Perfect Location For Your Office

When it comes to real estate in Orlando and Central Florida, Demetree has a rich tradition in the Central Florida community dating back to the 1940s. The Demetree family has been a pillar and major contributor to what Orlando and Central Florida are today.

For decades, Demetree Real Estate has been specializing in providing property management, leasing, development, consulting and construction management services to property owners throughout Florida. As Central Florida’s oldest, locally owned, full-service commercial real estate management firm, we believe that business is built on relationships. That’s why honesty and integrity are at the heart of everything we do.

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Topics: Office Space, Orlando - Downtown, office space for lease, office space for lease winter park, for lease office winter park, real estate in Orlando, Demetree Real Estate

Demetree Real Estate Services

Written by Demetree Real Estate Services

Demetree Real Estate Services has been specializing in providing property management, leasing, development, consulting and construction management services to property owners throughout Florida. We provide the broadest array of commercial real estate services in the market. Our seasoned team is connected and well informed with specialized expertise in delivering service for office, retail, industrial, multi-family, self storage and mobile home park properties.