Three Things to Consider Before Renting Office Space

By Ashu Bhandari

Introduction

A retired executive, Ashu Bhandari spent much of his career honing skills in management, strategic planning, and business operations in the jewelry industry. Finding much joy in his work, in 2011 Ashu Bhandari established a consulting company that offers free business consulting services to local companies. He has worked with Insight Psychological Services LLC on acquiring and designing new office space and negotiating construction services.

Opening a new business comes with many expenses, including the cost of establishing an office space. To avoid extra fees and garner the best foot traffic, a business owner should consider the following factors before signing a lease.

Considerations

1. Net absorption and vacancy rates. Net absorption refers to the quantity of occupied space in a region over a specific time period. If an area indicates negative absorption, a business owner has a larger pool of offices to choose from and room to negotiate leases. The same applies to vacancy rates. The longer a facility is not leased to a tenant, the better a deal landlords tend to offer.

2. Location. Depending on the size of a company, a smaller business may consider relocating to an area that improves the commute for a majority of its best employees. Moving an office further away for personal convenience can potentially lead to the loss of good staff members due to distance.

Conclusion

3. Square footage. An entrepreneur should determine space needs; considering one’s business growth over the term of a lease, he or she can decide if more space is needed to accommodate growth in staff and technological needs. If a business owner (for example, a dentist) does not foresee exponential growth in the near future, an overly large space and the accompanying overhead expenses can be avoided.