Checklist


Locating the Right Rental Can Be As Easy As...

Finding affordable office space to rent may seem—to a small business owner, firm or sole practitioner—like searching for a needle in a haystack. However, locating the right rental isn't so hard if you do your homework and get answers to some basic questions.

Here is a list of key questions a firm or business owner should ask when considering a potential office location:

  • What is the square footage of the office?

  • What is the rent per square foot? Determine whether the rent is gross (includes the base rent, real estate taxes, and operating expenses) or net (base rent alone).

  • Are the electric utilities at the location individually metered? (Individual meters are the fairest.)

  • Are heating and air conditioning available during nonbusiness hours? If so, are there special charges for these or for electricity outside the normal hours?

  • Does the building maintain the heating and air-conditioning systems?

  • Is there a full-time maintenance staff at the building, or is it your responsibility to have a maintenance contract? How long does it usually take the maintenance staff to respond? (The building's current tenants will have this information.)

  • Who makes minor repairs? Who changes the light bulbs?

  • Does the building provide a cleaning service? How frequent is it, and what's included?

  • What type of decorating or "build-out" will the landlord provide? For instance, build-out might include soundproofing or reconfiguring office space. Decorating might include painting, papering and installation or cleaning of carpets.

  • Who owns physical fixtures such as bookcases or lighting on the walls or ceiling once they are installed? (Often, ownership goes to the landlord as soon as fixtures are installed, regardless of who purchased them.)

Before you go office hunting, make sure you've defined your space needs and service priorities. Knowing what you need is good, but finding a broker who specializes in small-space tenants can help you determine your exact space requirements, locate rental properties that best fit and help you negotiate a favorable lease.

Here are a few things to consider when negotiating a lease:

  • How many years do you want the lease to run? To give yourself flexibility, negotiate a cancellation option.

  • Think about getting options for enlarging or decreasing your rental space. (The right of first refusal on adjacent space could be a plus.)

  • Does the lease allow the landlord to relocate you at his or her discretion? If so, will your relocation expenses be paid?

  • Is the landlord willing to negotiate a cap on operating expenses?

  • Does the building have an attorney on retainer to protest real estate tax increases? (The answer to this question should be "yes.")

  • What options will be available as renewal options?

Source: Wendy Habisohn, director of operations, Joseph Real Estate Services, Ltd., Northbrook, Illinois.




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