Here are seven common mistakes tenants make when renting office space.

Not Giving Yourself Enough Time

Tenants many times underestimate how long it takes to renew or relocate. Depending on how much space you have and how complex your specific needs are, it will take 9-18 months to negotiate your transaction. If you are a full floor tenant or larger it could take two or three times that amount of time especially if the market is tight. The process includes determining the available spaces on and off the market, touring the space, performing test fits on the spaces, negotiating the spaces, reviewing and negotiating the lease, building the space out and moving into the space. The whole process from start to finish is very time consuming. You want a seasoned Tenant Rep on your side to keep the process and all the players moving in a forward direction.

Lack of Planning

Many tenants do not really have an understanding of their overall office space needs. Do you know if you require 15,000 square feet or is it 18,000 square feet. That 3,000 square foot spread means big dollars over a five or ten year lease.

What is the load factor of all the buildings you are considering? 10,000 usable square feet in a building with a 20% load factor is 12,000 rentable square feet whereas 10,000 usable square feet in a building with a 14% load factor is 11,400 rentable square feet. Again, 600 square feet at $2.50 a square foot with 3% annual increases over five or ten years is big money.

You may prefer the building with the larger load factor for other reasons than money but at least go in educated.

What are your electrical needs? Your telecom needs? How should your space be laid out? Do you require collaborative space or more traditional space or a combination thereof? Where will your various divisions be placed within the space?

Not Reviewing Documentation

There is a lot of paper work to deal with when leasing an office space. A common mistake tenants make is signing the lease and other documents without proper review. Landlords put much effort into getting as much income as possible. There is nothing wrong with this as it is their business however you are in the business of maximizing your income as well and don't want to pay out money you don't have to if you can have a shrewd negotiator on your side to hammer out benchmark terms and conditions in your lease.

Rent and Security Deposit

Many tenants do not compare rental rates of similar properties and end up paying more rent than they have to. It is imperative to know not only the asking rates of similar properties in the area you are interested in but the actual strike rates including concessions each particular landlord is willing to give. You want to be supremely educated prior to entering negotiations with the various landlords. It is our job to know the market and to create the required leverage amongst the landlords we are negotiating with in order to drive the best possible economics based on the current market.

The security deposit will be based on your financial strength and/or industry. Our job is to minimize your securitization which can range from nothing to a personal guaranty, a letter of credit or 1 to 6 months of rent.

Not Reviewing Lease Terms

A tenant must understand the lease terms carefully. The real estate attorney will review the lease language and make appropriate deletions, additions or modifications. The Tenant Rep needs to make sure all of the terms and conditions negotiated in the proposal process are included in the lease. Some of the things to be aware of include the notice period. Are you comfortable with the timing? If the landlord has the right to relocate you to another floor or space in the building (something that should be negotiated out of the lease) how much notice do they need to give you? If the lease says 60 days, can you pack up and execute a move of both your physical belongings and your technology in 60 days? Do you have a sublet and assignment provision? Is it fair?

Not Realizing Negotiating Leverage

You do not want the landlord to believe you are a captive tenant whether your plan is to renew or relocate. Tenants have a tendency to think that the landlord is this overly powerful entity. That is not the case. A landlord is in the business of keeping their building full. A seasoned Tenant Rep will create a bidding frenzy amongst the various landlords for your business.

Absence of Tenant Representation

It is critical to have an expert on your side. It technically does not cost you anything and you better believe the landlord is in the business of making a profit on his investment. The landlord their broker and their attorney will do everything to maximize that investment.

You should have your own team of seasoned experts to maximize your concessions minimize your lease rate, and protect you on the economic terms and non economic terms and conditions.

Tenant Reps understand the market.  We will negotiate for you and narrow down the buildings that best fit your specific needs. Our advice and access to the right team of experts are essential. We will guide you into the space that you will be happy with for many years to come.

When it comes to leasing office space for your business, mistakes equal big dollars.