Ten Tips for Prospective Office Space Tenants

Negotiating the complexities of Corporate Office Space Leasing transactions is not unlike leading a successful trek up a tricky Colorado 14-er. Not only does it take knowledge of the terrain and expertise, but careful preparation and attention to details from beginning to end.  Here are ten valuable tips to take into account before you journey out on negotiating for new space, or to renew or expand a lease for your business.  

Ensuring Accuracy of Office Space Lease Billings: Is it Time for a Lease Audit?

Have you ever wondered about the accuracy of your monthly lease billing?  If so, you're not alone!  Errors and overcharges in Landlord's billings to Tenants are actually quite common.  

Understanding Office Building Rental Rates: Are you Comparing Apples to ... Oranges?

Commercial Office Building Landlords and Property Managers utilize several methods and lease structures for quantifying building rental rates and operating expense charges.  Learn how different pricing formats can disguise the true cost of a new lease.  

Tenant Improvements: Office Space Construction Issues

Understanding the details of Tenant Improvements construction can save you from budget-breaking surprises!     

• Commercial Office Space Construction Basics

  Often a "Tenant Improvement Allowance" or "TI Allowance" is provided by a Landlord to be used to reconfigure an office space to better suit a Tenant's specific needs.  This can be as minor as adding new paint and carpet to spruce up a tired space or as extensive as the full build-out of office space from a "Shell Condition."

• Effectively Utilizing a Tenant Improvement Allowance

  Unless a space is specifically offered "As-Is," Landlords typically provide some sort of "TI Allowance" that is typically a dollar allowance per square foot as part of the lease package offered to Tenants.  The amount of TI Allowance that a Landlord is willing to offer a Tenant depends upon several factors including the length of the lease term, the Tenant's credit strength, the vacancy rate in the building.  

• Build-out from Shell Construction

  With new office construction, a Landlord often installs the building's common areas including lobby, restrooms and interior hallways.  However, a Landlord may leave future tenant spaces in "Shell Condition," with no interior build-out.  This Shell Condition presents opportunities, challenges and risks for the prospective new Tenant.

• Turnkey Build Out

  Landlords sometimes offer Tenants a "Turnkey" build-out of their desired layout.  In this arrangement, the Landlord and Tenant mutually agree upon a space plan and the Landlord then hires, supervises and pays the architect, engineer(s) and general contractor to deliver the space to the Tenant.  Under this arrangement, the Landlord assumes the management and schedule risk and the Tenant is...

• Work Letter

  For any build-out of Tenant space, leases typically contain a "Work Letter" exhibit that spells out the amount of the Tenant Improvement Allowance and the details of who will hire the architects, engineers and general contractor, who will manage the construction, the process for mutual approval of plans, the consequence of delays...

For expert advice about leasing office space or selecting an ideal commercial real estate location, please contact Guidance's Commercial Real Estate Brokers today.