Startups, Get Your Finances in Order Before Leasing Office Space

This post was authored by Nathan Smith, a commercial real estate consultant and owner of Austin Tenant Advisors


As a startup or new business owner it’s important to be financially prepared before starting the process of looking for and leasing office space. Gathering your financial information and making your startup look financially strong in the eyes of a Landlord takes longer than you think so you want to do this well in advance. By preparing in advance you better your chances of gaining the Landlord’s confidence in your tenancy and increase your chances of negotiating better office lease concessions such as tenant improvements, rental abatements, etc.

Similar to how banks preapprove you for a loan, Landlords want to make sure you are financially qualified before they lease you office space, especially in hot markets like Austin, TX.   They will be investing time, resources, tenant improvements and other lease concessions in your tenancy so it’s imperative that you prove your financial ability & stability to pay any upfront costs and rent for the duration of the lease term.

Proving that your startup company is financially qualified takes more than a great business idea, having a large 401k, or a big expensive house.

  • If you are a startup company that has been around for a few years Landlords want to see current profit & loss statements, cash flows, balance sheets, and/or other sources of financing and funding. Depending on the landlord’s perception of your financials you may need to securitize the lease with a security deposit, letter of credit (LOC), personal guaranty or a combination of the latter. Your financial strength, lease term length, total lease amount, tenant improvement costs, & lease commissions will determine the amount needed to securitize the lease.
  • If you are a brand new startup with no track record or you’re an existing one with weak financials Landlord’s will probably want the person signing the lease to provide 2-3 years of personal tax returns and/or a personal financial statement. Depending on the Landlord’s perception of those personal financial statements they may require that the lease be personally guaranteed, need a larger security deposit, or need a letter of credit (LOC) that will cover the landlords up front costs to do the deal (e.g. tenant improvements, lease commissions, etc.).

Before you begin the search for office space, make sure you have your financials in order and have them ready to show Landlords. You might also consider having your business plan and pro-forma available to show your current and future financial projections.

Do all that you can to put your best foot forward, however because you are a startup Landlord’s still may require you to sign a personal guarantee, pay a larger security deposit, or have a letter of credit (LOC). You only get one shot at making a good impression! The more prepared you are and the better your finances look the better chance you have at proving to the Landlord that you can pay rent AND in receiving office lease concessions.



Nathan Smith specializes in helping startups companies find, lease and/or purchase office space in Austin, TX. He has advised over 300 companies in finding the best office locations, negotiate new leases and lease renewals, facilitate relocations and expansions. Outside the office Nathan enjoys hanging out with his wife and two children in Bee Cave, TX and is an avid runner and cyclist that participates in many local triathlons and running events.

When Does it Make Sense to Use a Broker to Find Office Space?

With the explosive growth of small businesses in the U.S., more entrepreneurs are finding themselves negotiating and closing leases without the help of a broker. While at times it makes sense to do this, using a broker in the right scenario can greatly assist in securing the best possible lease for you and your company.

Before deciding whether you need extra help, it’s important to understand what motivates brokers and how they can benefit you during a lease transaction.

Getting their attention. Knowing how brokers get paid is important to understanding their motivations — and why sometimes, they don’t return your calls. Most brokers get paid a percentage of your total lease value, which is typically between 3 and 5 percent. However, this often isn’t the full amount your broker will receive, as they usually have to share a percentage of their commission with their brokerage companies.

Getting to a signed lease can be a lot of work. This can involve conference calls or face-to-face meetings, searching for spaces that satisfy your requirements, setting up and attending property tours and actual lease negotiations themselves.

A broker will have to do these steps for a company regardless of if they’re looking for 10,000 square feet of space or 500 square feet of space, but the difference in size means that the amount the broker receives will be significantly different.

This is why you might want to — or have to — represent yourself in a lease transaction for a smaller space. If your space requirements are bigger or more complicated, then there are instances where using a broker may be in your best interest. To better understand the potential costs of working with a broker, check out our FAQ.

Knowing the landlord landscape. It’s tempting for experienced entrepreneurs to think that they can deal with the landlord directly and save money by not using a broker, expecting that the landlord will pass savings on to them. While there may be times when this is true, there are just as many situations where it isn’t necessarily the case.

While you might do a lease transaction every three to five years, brokers do many deals every month. The end result is that brokers are likely to know more about the landlords operating in the local area than you do. They know the property owning landscape well: who is flexible, who is motivated and who will go the extra mile to accommodate a tenant.

For example, let’s say you are a growing company with the stability to sign a long-term lease if desired, but want to retain a short-term lease for greater growth flexibility. In situations such as this, an experienced broker can guide you to spaces with landlords who are not only flexible, but can accommodate you in alternative buildings while under your current lease.

Let’s say you run out of space two years into a five-year lease, you may have the option to transfer your lease terms and move to a larger space in their portfolio. Additionally, as opposed to having to take a large space that is intended to be grown into, a broker may be able to negotiate rights of first refusal on adjacent spaces one or two years into your lease term, saving you from paying that rent from the onset.

Striking a creative deal. A broker may also be able to work out a plan that works best for your company’s financial needs by getting creative with how your rent escalation is constructed. If you are working on a product launch that runs on an 18-month cycle, a broker may work with you to escalate your rent accordingly instead of a traditional 12-month rent increase cycle.

If you are facing a scenario where you may have run out of space completely, they may even be able to negotiate a lease buyout with the landlord so that you can move into their new space without paying double rent.

There are no hard and fast rules on when to work with a broker. Before putting in a lot of work shaving a few percentage points off your lease by saving the landlord from a commission, ask yourself if you’re paying for something that you shouldn’t have to or if there’s any flexibility that is worth more to your company than the rent savings.

These factors could amount to much more savings than the commission saved and passed to you.

This article was written by Susie Algard and  originally featured on See original source here:

Close Encounters of the CRE Kind.


The OfficeSpace team had the pleasure of hosting it’s first home town event for the CRE community in Seattle this past week. It was an intimate evening with an open format for answering questions on our broker services, product demonstrations, all of course while engaging with everyone on the latest commercial real estate talk in the Pacific NorthWest.

Perhaps the most surprising comment of the evening was how fantastic it was to speak with our team in person. More than once we heard “How often do you get to speak to a website face to face?”.  Being in the internet game with our heads down, working hard to make our site as efficient and user-friendly as possible for both the broker and the tenant communities, we sometimes forget how important that face time really is.

It’s a recurring theme in the tech start-up community as we “Eat. Sleep. Breath.” with our computers  and our “Eat. Drink. Learn” event was a great reminder to stop, drop everything and talk…in person.  We look forward to continuing this trend as we grow and continue to answer your questions – face to face, over the phone and of course, online.

A generous thank you once again to our sponsors, Gateway Construction and Complete Office Furniture who provided some fantastic give-aways and support of the evening.

We even managed to snap a few shots of the evening’s festivities as posted below.





2013 Didn’t Bring An NBA Team to Seattle, But It Did Bring…

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What does Seattle have?  A thriving start-up community and established technology hub, world renowned coffee, an infamous independent music scene, a top ranked NFL team, the lush green of the Pacific NorthWest and so much more.

Sadly, 2013 did not bring back an NBA team, but there is a game changer in town.’s long awaited new platform is about to change the way players in the commercial real estate arena engage with clients.

In fact, businesses and commercial real estate pros now have a new online stadium with’s improved site and service for the Seattle market.

Since launching its new service 18 months ago, has served thousands of tenants looking to lease office, retail and industrial spaces. allows tenants unrestricted searches of its comprehensive database with over 27,000 properties, at no charge, something typically not done in the traditional commercial real estate world.

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Today, we are proud to launch our free service in our home market of Seattle.  “We felt this was a great time to launch as the business community is thriving and there are a lot of eyes on Seattle right now.” says Susie Algard, CEO. 

Businesses can now search from over 7,000 available listings in the Greater Seattle area. We expect the number of tenants coming to access these listings will grow quickly, as we are the city’s only commercial real estate site offering this type of platform.

The new site has a clean design aesthetic with an intuitive, user-friendly map based search, photo rich listings, and advanced search filters, all of which were created to make the tenant search experience much more engaging and efficient.

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“With today’s launch, we are excited to be bringing more qualified tenants to the broker community.” says Algard.’s new site was designed with these relationships in mind. The commercial real estate audience can benefit from several complimentary marketing tools, including nationwide tenant rosters, a no-software flyer creator, comprehensive market surveys, and upgraded property listings.

So, while the city sits waiting patiently for another opportunity to bring back the NBA, we’ll continue to up our game to better serve the Seattle market. We’re no substitute for a basketball team but we’re practicing our virtual jump shots none the less in hopes of a CRE MVP title. is now serving Seattle, Denver, Portland and San Diego with upcoming markets on the horizon.

Broker Banter – Questions & Answers (The Portland Chapter)

We’re the first to admit we don’t always have all the answers when it comes to the fine details of leasing and all the questions that come with it. That’s when we turn to our commercial comrades to aid with the broadening of our knowledge base.  This week we’ve gone straight to the source to speak with Portland, OR broker Kristi Ricker.

We connected with Kristi to talk shop, and in fact, where to set up shop.

OfficeSpace: What do you think is the most important question a tenant should be asking, that they never seem to ask when looking for space?

Kristi: Zoning, tenants need to learn more out about zoning. There are so many issues in this area and if you’re not aware of this in the beginning it could hurt your chances of securing your ideal space. It’s something you should ask your broker about as they’ll be able to determine how to move forward in narrowing down your search. It’s just not something that’s on the top of your mind when you’re looking for a space and it definitely should be.

OfficeSpace: What is the best tip in negotiating a lease you think all tenants should consider? 

Kristi: The longer the lease, the better you’re going to be able to negotiate, especially if you are going to need anything done to your space. People are nervous with the idea of securing a 5 year lease, they think “What if something happens?” – but they can always put a clause in allowing them to sublease (A lease of a property by a tenant to a subtenant.).

OfficeSpace: What do tenants focus on, that perhaps they shouldn’t when searching for space?

Kristi: Recently, I’ve had clients who have looked at a space and were concerned the buildings around it were being worked on or unfinished. Unfortunately, this doesn’t always paint a pretty picture of the neighborhood, especially when it’s an up and coming urban area. I recommend looking at the bigger finished picture and inquiring about what’s being developed in the area.

OfficeSpace: What area of town would you recommend to a Start-Up in Portland?

Kristi: The inner Southeast, Northeast and North Portland are very hot right now. They were predominantly industrial areas and now they’ve turned into these very creative pockets with great opportunities for startups, restaurants, retail and more.

OfficeSpace: What are you starting to see more of in Portland?

Kristi: Tons of startups, restaurants, breweries, delis – there’s a great food scene here.

OfficeSpace: And lastly, what makes Portland great?

Kristi: Portland‘s so diverse, we have a little bit of everything for everyone. Everything goes here – that’s what I love about it. I see all these new ideas here and they seem to work. If you have a crazy, fun new idea, there’s a great support network for that here. It just seems out of the ordinary things work here more than other places. Nothing is guaranteed but your chances of making it a go seems to have better odds in Portland.

Kristi has over 15 years of real estate experience in the greater Portland area and has recently started her own company.

Need Office, Retail or Industrial Space in Portland? Visit us here –

Movin On Up (Part 2)

Chalkboards and Chairs and Chartreuse Oh My!

Last Thursday was the big reveal for our new space! This was it, a sneak peek at our new digs. (Side bar – the biggest concern when setting up a new office always seems to be the floor plan aka “who am I sitting beside?”. It may be engrained in us from high school but that’s okay because we’re all about embracing our youth here at

Potential Floorplan (open concept) w/ Chalk “Brainstorming” Wall.

Amongst the concerns we laid out in last week’s blog “Movin On Up Part 1” were – what to do with our office furniture and whether or not we should design the space ourselves. Well, it turns out the best laid plans are ones that involve doing a bit of both.

1. For our furniture/supplies dilemma, we referenced Pinterest obsessively and tried to incorporate our own furniture with a few creative ideas from Pinterest ie. Our Chalkboard Wall.

2. We also figured out the most efficient way to get rid of the furniture we couldn’t re-use was to sell it to our neighbors in the same loft space. We already share the same esthetic and neither party had to travel far for deliveries and pick ups.

3. Despite our own in-house decorating efforts we still needed a bit of assistance so we hired a local designer to help walk us through a few things. Keep in mind small budget doesn’t equal 100% DIY. We were still able to bring on a professional who could help tie everything together and offer some affordable solutions.

4. In keeping with our brand identity we’ve decided to add accents like throw pillows and desk supplies in our team colors while keeping everything else “Ikea” white. This keeps costs down, is easy to refresh and won’t look dated in a few years.

Next Friday is the actual move and we’re sourcing things like gently used boxes for packing (more enviro-friendly/economical) and looking at how to introduce ourselves into our new subleased space which happens to be shared by a large Seattle web based business who has been kind enough to offer us our new home.

Stay tuned for the finished product and a new look at Chez

Movin On Up! (Part 1)

Big News! We’re moving offices!

Our Current Space (the team hard at work!)

Yay! Streamers, confetti, balloons!

Excitement, pride, growth – all good!

Suddenly, those feelings were followed up by the pending loom of “ah nuts, moving means packing means boxes means design choices and so on and so on”… Just when we got comfortable and everything had a place. We needed to retreat to the “Living Room”..

The “Living Room”

Yes, there are many questions we here at have now been faced with regarding our upcoming move. So we thought who better to share them with then you.

  • First we thought, what do we do with everything?
  • Do we bring our old furniture to the new location? Recycle it? Repurpose it? Resell it?
  • Start from scratch?
  • Hire a designer vs do it ourselves?
  • We’re a small team with a budget to match so how do we maintain our hip, cool, start up, tech office vibe we pin daily on our Pinterest board?

You might be asking, aren’t these some of the many things you deal with when tenants contact you about moving and finding office space through You’re absolutely right, but there’s something to the saying “walking a mile in someone else’s shoes”. So, as we continue our adventure over the next few weeks we’ll be sharing what we’ve learned and our progress as we approach moving day (October 5th!)

Do you have any office moving horror stories or perhaps any great recommendations or tips? If so, please feel free to send them our way.

P.S. We’ll be keeping this…

Obligatory “Office Space” poster

How Important is the Office Neighborhood?

At, Amazon is a part of our lives in more ways than one.  Our headquarters are located in the downtown Queen Anne/Belltown neighborhoods, within one mile of South Lake Union/Denny Regrade, home to Amazon’s new proposed campus, Facebook’s new Seattle office, Vulcan and a number of up-and-coming internet companies.

Recently, Seattle mayor Mike McGinn has proposed increasing the office tower limit to 240 feet, up from the current 124 feet in South Lake Union.

Why are all these companies moving to South Lake Union?  The answer is simple: the neighborhood puts them in the “center of the Seattle universe.”

McGinn even went as far as to credit the neighborhood growth with the success the city has had in recovering from a slow economy CEO Susie Algard was recently featured in a article speaking to the emphasis of transit-options and amenities.

“[The companies] want to be as competitive as possible on the recruiting front,” Algard said in the article.  “They know that people want to work where they can easily walk to lunch and other amenities.”

The office neighborhood has become particularly important with tech companies in the Pacific Northwest.  These companies are competitive with recruiting and know what their young recruits want.

In addition to restaurants, Algard mentioned doctor’s offices, parks, fitness centers and parking lots as important amenities.  On top of these amenities, South Lake Union is bustling with new condominiums.

For this reason, our listings always include a walk score.  Tenants want to know what’s nearby and how their employees will get to work.  Our walk scores are expandable and include a breakdown of transit, restaurant, hotel and coffee options by distance.  Tenants can also search for directions by entering information on their commute.

Let’s hear back from other cities: How important is the office neighborhood to you and what are the quickly growing neighborhoods in your city?

How to launch a product with a budget less than a direct mail campaign

We recently completed our beta launch in Portland OR in late January of this year and it went well as far as I could tell.  In the first 3 months, we had connected around 350 tenants to landlords, property managers or brokers.  Tenants had found space using our site and leases were being executed.  There’s nothing wrong with that.  The challenge for us, however, had been educating brokers on our new service and how it actually works for parties, the broker and the tenant.  

Nevertheless, when it came to launching in another city, I didn’t want to execute the same way.  What bugged me was despite the email campaigns in Portland highlighting our new service to brokers, I knew at best, only 20% of those emails were being opened.  We sent beautiful folders to every broker describing in detail how our service works but I was sure a large percentage of those went unopened and into the recycling or worse into the trash.  So, we began brainstorming other ideas.  Our goal – to reach every broker and explain exactly what it is we do and again, how can help them.

This past week, we announced the launch of our new service, starting in Denver, while we were at an industry trade show.  Instead of sending out direct mail, we delivered customized gourmet cupcakes complete with an edible logo to every brokerage in greater Denver – that was over 600 cupcakes in total.



I reasoned even though it’s an edible item, certainly people would remember who gave it to them.  We built a campaign around our delicious delivery, building anticipation through our social media channels.  We created postcards to go with our cupcakes letting everyone know we were celebrating our birthday in Denver – and the cupcakes were free, just like our service.  We encouraged our recipients to use social media to tell us how they liked our gift and we waited.



I can already definitively say this campaign was much more successful and cost-effective than our first and here’s why: when we began to make our follow- up calls, people wanted to talk to us.  They wanted to tell us that they liked our clever idea and more importantly, they wanted to know what the company was doing.

If we could be this creative just to get their attention, what would that mean for the types of products we could create to help them? We achieved what direct mail could not: a captive audience (with full tummies to boot!).

Susie Algard
CEO & Founder
follow us on twitter: @officespace_com
follow me on twitter: @susiealgard