Whether it’s your storefront or office headquarters, having ideal and affordable office space will help your business thrive. However, once you find the perfect space, negotiating the right deal can be tricky. Here are the top five factors that affect the cost of office space along with tips for negotiating your best deal.

Amenities

Consider which amenities are critical for your business and make sure access to those amenities is included in your contract.  If amenities are offered that you don’t need, you may be able to save money by excluding those amenities from your contract. You may also be able to shave costs by sharing certain amenities with other tenants such as restrooms, conference areas and kitchen space. Here is a list of common amenities: 

• Security personnel
• Cleaning services
• Parking garage
• Free employee and visitor parking
• Kitchen or snack area
• On-site cafes and delicatessens
• Employee lounge
• On-site leasing office
• On-site gym
• On-site child care
• Dry cleaners
• Sundry store
• Conference rooms
• Specialty design finishes
• Outdoor or patio space
• Move-in ready 

Building Classification

Office building classification will certainly affect the final cost of your rent. Similar to hotels, office buildings have a rating system ranging from the highest Class A space to the lowest Class C space. Great deals can be negotiated by finding a high quality building in the lowest acceptable class. It is not uncommon to find extremely well-run and well-built Class B and Class C properties. Here are the primary differences among the property classes.

• Class A buildings are generally the most modern and prestigious building. Class A properties are less than 10 years old and include amenities such as luxury materials and finishes, concierge services, 24-hour security and quality dining options.
• Class B properties are between 5 and 30 years old. These properties include quality materials and finishes and usually include amenities such as a cleaning service, security patrol and basic dining options.
• Class C properties are older than 20 years. Class C buildings have modest materials and finishes and only basic amenities. 

Location

Conduct a cost-benefit analysis of various locations for your business. The downtown high-rise office may be worth it for firms that need prestige and visibility such as law firms or financial firms. If your employees travel frequently, being close to an airport may be ideal. Consider proximity to air, highway or marine transportation if you deal heavily in import and export. Many cities have concentrated business parks for certain industries that may be more ideal for your business than downtown locations. Alternately, a suburban area may be ideal if most of your customers and employees are located outside of the city center. Location is a key factor in determining cost.  Premiums are added both for desirable commercial locations as well as locations near major transportation hubs, restaurants and other amenities. Ultimately, your location should ensure your business generates new customers, decreases supply chain costs and maintains a great place to work for employees.

Property Management Team

Carefully consider the management team of your new office building. Choose a property manager that is flexible and willing to work with you as your business needs change. An unresponsive landlord or unforeseen facility issues can cost you more time and money than you think. Meet with your property management team in person and gauge their knowledge and responsiveness. Ask to speak to current or past tenants. Your property management team is the expert on your building and responsible for safety inspections. Ask about any outstanding facility issues and request the latest safety report. Your management team is also the mediator for tenant questions and grievances.  Ask your property management team how they have handled past disputes, both with the management team and among tenants.  Make sure your contract is clear regarding the way tenant requests and disputes will be handled. Finally, choose a management team that offers convenient payment options and makes it easy to submit requests.  

Type of Lease

Identify the type of lease you will be signing with your landlord. There are three common types of leases. The first is a Gross Lease which covers rent plus all costs such as utilities, taxes, repairs, insurance and maintenance costs in your monthly payment. The second type of lease is a Net Lease. A Net Lease usually only covers the cost of renting office space. The tenant is responsible for all additional expenses which can vary greatly from month to month. A third type of lease is called a Modified Gross lease. This lease allows the tenant and landlord to customize what will be covered in the monthly payment.  

You may be able to negotiate more favorable terms if you can customize certain parts of your lease. Look at historical costs of items such as utilities, taxes and maintenance. To minimize your exposure, negotiate a set monthly amount for items that are risky or likely to fluctuate. To avoid unexpected increases in your monthly payment, negotiate expense pass-through or escalations clauses. If you anticipate the need for more office space before your lease term ends, include an expansion option in your lease. 

Negotiating the best deal for your office is straightforward if you have a responsive management team and you know which items are negotiable. Spending time upfront to negotiate an ideal lease will give you peace of mind and allow you to focus on growing your business.