5 Questions to Ask Before Signing an Office Lease


5 Questions to Ask Before Signing an Office Lease


The average person will spend about 90,000 hours of their lifetime at work. So, if you’re a small business owner, finding the perfect office space is fairly important — it’s where you and any employees will be spending a significant amount of time. Yet if you’re new to commercial leases, how do you know where to start?

When looking for your first office space, you may be exposed to new vocabulary, new business risks, and new questions about your business goals and culture. We’ve simplified the process with a quick primer on reviewing a location. Here are five questions you should ask before signing an office lease.

1. How Fast Is Your Business Growing?

You want to have an office that can accommodate all your employees without losing money on wasted space. However, if you plan on expanding in the next few years, you could quickly outgrow the building. Having a good idea of expected business growth can help you strike the right balance and find the amount of square footage that makes sense for you.

Is your business in a service industry? In this case, another factor to consider is how many clients or business partners visit the office. You want to have enough room to hold conference meetings and welcome guests, so plan for those spaces in your initial research as well.

2. Is the Space in a Good Location?

The location of your office building is important when attracting talent to your company. A space in an unsafe or undesirable location can deter people from applying. Stay away from areas with multiple vacant or run-down buildings, and be sure to align your chosen location with the preferences of employees in your region — there’s a reason new tech companies opt for major cities, but more traditional businesses can thrive with an older talent base in suburban areas.

In addition, find a place that is commutable for your workers. It makes employees feel valued and saves them money. Many companies reimburse employees for travel. You could then end up spending 56 cents per mile traveled.

The rate incorporates the cost of insurance and maintenance for the company vehicle. So, the farther they have to drive to and from the office, the more miles they cover. It’s also a good idea to have a space near your customers and clients.

3. Is the Space Able to Handle Your Company’s Needs?

One of the things to pay attention to is the layout of the space. Does the building have enough power for your daily activities? Since most companies rely on technology, you need to be able to power multiple devices at once. Therefore, you want a modern property if your employees work on computers all day.

Also, you want to make sure there are plenty of electrical outlets. They should be in convenient locations, such as near desks. You can have your space rewired, but this will be a costly process.

4.  What Tenant Improvements Are Included?

One of the expenses most often forgotten about is periodic updates. The placement of electrical outlets, the ability to update walls and flooring, and other cosmetic touches will have a significant impact on your business presentation and overall culture — so make sure your lease terms layout budget and policy for improvements as well as who is responsible for making them.

These are known as leasehold improvements, tenant improvements, or build-outs in the commercial real estate industry. Ask questions about improvements early in the location search. 

For example, when an old office carpet needs to be replaced every 10 years, or your business shifts toward cubicles, the lease can tell you whether those costs may be covered or out of your own pocket. This is an opportunity to negotiate for better terms, as building owners know that these accommodations can inspire a long-term working relationship. 

5.  How is Rent Determined?

Of course, the biggest expense for a new office lease is going to be the rent. Make sure you know how much it might increase each year. The amount should be stated in your lease agreement. See if there is an option to renew your agreement at the same rate and have this written into the document. That way, there are no surprise expenses.

Besides your monthly rent, determine any additional costs. For example, you may have to pay for utilities, trash pickup, or cleaning services. In addition, make sure you know who handles the repairs. Understanding all your expenses allows you to stay within your budget.

5.  How Much Parking Is Available?

Some spaces may have limited parking options. Suppose your office is located in a strip mall. There may not be enough room for all your employees. Consider how much space you will need before signing a lease. Plus, think about how often clients come to visit.


In addition, determine how accessible the parking lot is. Can employees easily turn into it? Is there a lot of traffic driving by? Having an office space on a busy road can deter customers from stopping by. It’s a good idea to check out the parking lot at different times of the day. It gives you a better picture of the overall parking situation.

What to Keep in Mind Before Signing an Office Lease

Whether you’re moving to a new office space or renting for the first time, there is much to consider. You want to ensure the building fits your company’s needs, so ask yourself these questions before signing any documents.

Need a Business loan to grow? Check out Capital for Business funding solutions or apply for a business loan today.


Author Evelyn Long

Evelyn Long is a writer and editor focused on home building and construction. She is the co-founder of Renovated, a web magazine for the home industry.


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