Jul 27, 2020

9 Office Leasing Mistakes to Avoid

By Don Catalano

Connect

9 Office Leasing Mistakes to Avoid
In 2026, we'll celebrate the 300th anniversary of the first dedicated office building -- the (Old) Admiralty Office in London. We've learned a lot about how to build, occupy and use offices since then, but we still have a long way to go, at the same time. In our experience, here are the nine mistakes that we see tenants making every day.

 

1. Not Understanding Your Needs

Leasing office space isn't simple, and one of the biggest leasing mistakes that companies make is to go into the process of finding a new office without understanding what they really need. It isn't just a matter of square footage and location, either. Understanding needs means thinking about layouts, what types of work will be done and what types of employees will be doing it.

 

2. Leasing What You Need Today

Just because you know what you need, though, doesn't mean that you're ready to lease space. When you take on an office, you're making a long-term commitment, so you need to lease the space that you'll need three, five, ten, or more years in the future, as opposed to what you need today.

 

3. Calling Leasing Signs

Once you get ready to go, it can be tempting to make a few exploratory calls just to see what type of space is available and at what cost. Doing this is a huge mistake, though.  When you call a sign and talk to a listing broker you could get bad information or make the wrong impression. At the same time, you might also make it harder for another broker to come in and represent you down the line.

 

4. Working Alone

If you aren't a commercial real estate expert, working without a tenant representative is a huge mistake. Tenant reps are in your corner to help you get the best deal possible. They make sure that you get access to the entire market, negotiate on your behalf, and don't charge you a penny for their services. Find one early, and get him or her involved throughout the process of leasing your new office.

 

5. Having a Closed Mind

Especially if you have a tenant representative in your corner guiding you, keep your mind as open as possible. Whether it's a building in an area that is improving so that it will be up to your standards in a year, a space that can be configured creatively, or a negotiating term that is complicated, but advantageous, finding an office can be a process with twists, turns and surprises. Keep your mind open and trust your partners and your hired experts.

 

6. Avoiding New Space Because It's Too Expensive

Many tenants think that new space is too expensive and, instead, gravitate to existing buildings that are already built-out. However, since new buildings frequently come with generous tenant improvement (TI) allowances which means that you can have your space built out without incurring any demolition costs, new space might be the most affordable option.

 

7. Believing the Asking Rent

While buildings typically have a set "asking" rent, don't believe it. Most landlords -- especially if you're working with a tenant rep in your corner -- will negotiate to earn your business. Let them ask what they want, and you offer what you want, and you'll find a solution in the middle.

 

8. Getting Panicked Into Moving Too Quickly

It's a frequent tactic of landlord representatives to talk about how there is another tenant that is about to sign an LOI and that you have to get your offer in. Now.  Or else. Sometimes, this is true. Usually, it isn't. Let your tenant rep guide you, and use your instincts. If you somewhat like a space, but don't feel like it's the best space in town at the best price, then it's likely that others feel the same way.

 

9. Moving Too Slowly

On the other hand, when you find a winner, don't dawdle. If you do have a great opportunity, it's good to remember that other companies are looking and that they are probably smart enough to identify it as well. When you find something you like, move decisively so that you don't lose the space.

 

Here are a few other articles we think you'll enjoy:

The Importance of An Office Layout

Ways to Know It Might Be Time for New Office Space

8 Things to Be Aware of in Your Commercial Leases

 

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Topics: office leasing

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Don Catalano

Don Catalano

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