5 Keys in Negotiating an Office Lease

You don’t get what you deserve. You get what you negotiate. This especially holds true in the world of real estate.

While the process of negotiating a commercial lease can be stressful for most business owners or decision makers, keeping these five factors in mind can ensure that you avoid some of the most common mistakes made by entrepreneurs:

1. Find leverage.

Regardless of whether it’s a landlord’s market or a tenants’ market, there’s always something that can be used for leverage.

One of the most important ways to create leverage is by use of time. Most leases take months to complete so avoid procrastinating when it comes to the office search. Don’t let a lack of time decide the lease terms.

Create leverage by keeping mum about feelings about the  space, especially to the listing broker or landlord. This will allow the broker to do a better job negotiating.

If the other party recognizes a desire for the space and that a prospective tenant can’t select anywhere else, the other side just received some leverage. It’s always a good idea to have alternative space options at hand.

According to Jason Bollhoefner, vice president at Corum Real Estate Group in Denver, “Always have a solid back-up option at hand, especially in an improving real estate market. Being prepared to walk away is a very powerful aspect of successful negotiation.”

2. Don’t think rates. Think term.

Tenants often become caught up in rates upon finding a space. While the rental rate is important, especially the gross rate, the term of the lease can have a more significant impact on finances.

Instead of worrying about bargaining for a few percentage points off the rate, spend time negotiating the term and thinking about the company’s true needs for the future. If the wrong term is selected, the tenant will likely end up paying more in rent for a space that doesn’t work for the company than what was saved by paring 5 percent from the asking rental rate.

3. It’s never true that a tenant gets anything free.

The length of the lease’s term also affects other key variables such as tenant improvements and concessions such as rent abatement. This goes both ways. Don’t lock into a term for the lease that’s years longer than initially desired just for free rent or better tenant improvement dollars. Such improvements are never free. Tenants need to understand that these costs are always baked into the lease’s value by the landlord. The landlord makes the money back at some point.

4. Arrange for a a solid legal review.

Keep in mind that a broker is not a lawyer and that brokers are paid on commission. Their commission increases based on the value of a lease. While brokers are experienced in lease negotiations, they do benefit from a tenant’s signing a lease and typically receive nothing if no lease is signed.

This structure, unfortunately, creates some conflicts. Paying an experienced real estate lawyer to review the lease should be a part of the negotiation process. The lawyer is paid regardless of the space chosen or even if the rental is postponed or a potential tenant walks away.

5. Negotiate protections for an exit.

Negotiate some protections for exits should things go wrong in the future. If a tenant feels it has good visibility for the next two years but not five, try to negotiate for some cancelation clauses keeping that in mind.

Finally, don’t forget to negotiate the lease. Unlike some things in life, the tenant does win from negotiating. Be creative to get needs met.

To learn more about the commercial real estate process, visit our FAQ.

This article was written by Susie Algard and  originally featured on Entrepreneur.com. See original source here: http://www.entrepreneur.com/article/237113

5 Lease-Term Questions Facing Every Entrepreneur

Now that you have chosen a space that meets your company’s needs, the next step is negotiating your office lease. One of the most important decisions for a company to make during this process is deciding how long they want to stay in that space.

Prior to starting your space search, and definitely prior to making any commitments on a lease term, ask yourself these 5 questions.

1. Do I anticipate changes that might affect my future space needs? A space that works for your company today doesn’t mean it will work for you a year or two down the road. It’s also important to consider whether the space will be effective in attracting the right kind of talent as your company grows.

As a new company, you might simply be relieved that someone let you lease some space, but recruiting a team is easier in some spaces than others.

2. Will I need to invest in improving the space or is it move-in ready? If you need flexibility in the term of your lease, and the space requires a lot of build out, don’t expect the landlord to pay for that.

Landlords expect to make their money back on any tenant improvement allowance by including these costs in your lease rate or term. Hence, a substantial investment in improvements may force you into a longer-term lease by amortizing the improvements over a longer period of time.

Be prepared to pay for tenant improvements out of pocket for shorter-term leases or expect a longer-term request from the landlord. Tenant improvements are never free.

3. Is the rent likely to increase in the future? Keep an eye on the local office market to get a general idea of rental rate trends. If using a broker, take advantage of their market expertise. Market comps are valuable data that a good broker can get for you.

Ask them to provide comps for the same building and comparable buildings to help you determine the trends. If considerable rental spikes are expected in the future, consider locking in a longer-term lease at the current rate.

4. Exactly how important is location for my business? Although primarily applicable to retail businesses, it’s always worth considering the potential impact of a space’s location. Your location may be important for attracting talent, situating yourself strategically among complementary and competing companies, establishing your brand and so forth.

If the success of your company depends heavily on location, or your company becomes more valuable because customers can find you easily, consider securing that space for a longer period of time. On the other hand, if your business isn’t particularly driven by location, you can be more flexible with the lease term. Finding a comparable space likely won’t be an issue, should the landlord decide not to renew your lease.

5. Will my rent be lower if I sign for a longer term? This is the trick question! Most entrepreneurs think that they must sign a longer lease to get the best deal. While landlords (and brokers) are happy to work with longer term leases, and will reward this with better incentives, that does not mean that this is a better deal for your company overall.

Lease term is one of the most important parts of your lease. Many brokers will admit their clients do not negotiate carefully enough. Ask yourself the right questions early to help you negotiate a term that works for your company’s current and future plans.

To get more information about lease term best practices other tenant-related topics, visit our FAQ.

This article was written by Susie Algard and  originally featured on Entrepreneur.com. See original source here: http://www.entrepreneur.com/article/235894

Broker Banter Q&A – Part II (The Denver Chapter)


This week we have the pleasure of sharing another Q&A for our Broker Banter series, featuring Denver Broker Jason Bollhoefner.  Similar to our previous conversation with Portland broker Kristi Ricker, we connected with Jason to get more insight into some key things that tenants should know before touring potential sites, selecting a space, and negotiating a lease.

OfficeSpace: What are some things that tenants typically overlook when looking for new space that they should be paying attention to?

Jason:  Commercial leasing is a complex process, fraught with significant potential risks and liabilities, and should only be handled by a representative that has both the necessary experience and your best interests in place.  I have found tenants tend to overlook the importance of their creditworthiness and the time required to bring a commercial lease transaction to close.  Leasing commercial space is very comparable to getting a loan from a bank.  Tenants should be prepared to share financial statements and to appropriately collateralize the lease transaction.

Commercial real estate transactions, even for a seemingly “simple” deal, may take a considerable amount of time to successfully complete.  Having adequate time to identify, tour, design, price, negotiate terms on, construct or improve, and move into suitable commercial space helps to shift negotiating leverage to the tenant’s benefit.  Start the process 4-8 months before you need to occupy your new space.

OfficeSpace: What are the best practices to selecting the best space?

Jason: The best space is the space which meets unique criteria that vary by industry, property type, the nature of the user’s business and their business plan, and location.  I ensure a successful process by taking the time to understand the intricacies of my clients and their businesses up-front so the real estate supports these needs and requirements.

OfficeSpace: What are the best practices in negotiating my lease?

Jason: The best practices in negotiating a lease are summarized into 4 critical path items as follows:

  1. Start your needs analysis and discussion well before the need is estimated to commence.
  2. Engage an expert commercial real estate broker with proven experience and leverage their knowledge; we are here to help you starting with the needs analysis and continuing from occupancy throughout your lease term.
  3. Always have a solid back-up option at hand, especially in an improving real estate market. Being prepared to walk away is a very powerful aspect of successful negotiation.
  4. Engage a real estate attorney to provide counsel and revise the lease document.

OfficeSpace: What are the hidden costs in a lease?

Jason: Your real estate broker should be well versed and provide assistance in mitigating latent/hidden costs within the lease agreement.  The primary area of hidden costs arise from Operating Expenses or Common Area Maintenance (CAM) charges and maintenance obligations.  Other potential pitfalls include Tenant Restoration requirements, Tenant Alteration processes, landlord administrative markups, and property management fees. My experience  negotiating thousands of lease agreements is invaluable to my clients in these areas.

OfficeSpace: What’s the best way to compare offers?

Jason: The best way to compare offers is on a Net Present Value (NPV) basis and $/RSF basis with a matrix for a side by side comparison.  This analysis should also take into account intangibles such as building image, proximity to employees and clients, ease of ingress/egress, and the true cost of occupancy including any tenant contributions to build-out and relocation costs.

Jason Bollhoefner joined Corum Real Estate Group as a Leasing Agent in January 2001 and was promoted to Senior Leasing Agent in 2007 and to his current position as Assistant Vice President in 2008.

Find office, retail or industrial space by visiting: http://www.officespace.com/Denver-CO

Seattle vs Denver: OfficeSpace.com Super Bowl Edition

Who’s taking home the Lombardi trophy this weekend? The Denver Broncos or the Seattle Seahawks? It’s been the question on everyone’s mind for the past week, and Super Bowl predictions have been popping up everywhere. The team here at OfficeSpace.com wanted to join in on the fun and share our own predictions about who will come out on top. In the spirit of the upcoming game, we looked how these two cities stacked up against each other on our website (from the number of visitors to the number of leads generated) to predict the Super Bowl Champs.

Take a look at our infographic below to see how Seattle and Denver matched up on OfficeSpace.com over the past 6 months (and who we think is going to win it all this Sunday)!


Brokers, This Leads For You.

You may not always be aware your listings are with OfficeSpace.com as your brokerage often utilizes 3rd party marketing groups to maximize your exposure! However, when you receive a lead from us, please take it seriously. Here are a few more details to familiarize you with the way our lead system works.
1. All leads sent from OfficeSpace.com are qualified and should be answered as soon as possible.
2. There is no hidden fee to access your leads or contact details from OfficeSpace.com
3. If multiple brokers are on one listing, the lead is sent to all involved. (*Please Note: All responses to this lead email are also viewed by the tenant so be sure to begin new correspondence with fellow brokers on said listing.)
4. See copy of sample broker lead below.

Remember to add your listings to OfficeSpace.com to reach tenants searching for office, retail and industrial spaces. Should you have any questions regarding listings, leads or how to receive the most effective exposure with our service please don’t hesitate to reach out:

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. OfficeSpace.com’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 OfficeSpace.com’s improved site and service for the Seattle market.

Since launching its new service 18 months ago, OfficeSpace.com has served thousands of tenants looking to lease office, retail and industrial spaces.  OfficeSpace.com 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. OfficeSpace.com’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.

OfficeSpace.com is now serving Seattle, Denver, Portland and San Diego with upcoming markets on the horizon.


Raise your hand if you know how stressful, expensive & time consuming setting up a new office is?

That’s what we thought when we set up our new office. It was exciting and a proud moment but it also took valuable hours out of our day. We needed something or someONE to help streamline the process…fortunately for us we’re in the business of dealing with office space and all it’s intricacies and had a few tricks up our sleeves.

However, for those of you not privy to all the details, requirements and partners needed to effectively set up a new office space this can become the bane of your existence, in other words it sucks.

There are millions of sites out there to help with finding the right person for home improvements, in fact there’s a whole network (ahem HGTV) devoted to it. But what about those businesses looking to set up a new office, retail or industrial space?

Allow us to introduce you to our free OfficeSpace.com Concierge services. Did someone say “Free“? Yes, completely free services  – much like a hotel concierge is there to ensure a guest’s needs are met, our concierge is there to offer direction, advice and connections to the right people to get you up and running.

Why spend hours researching a general contractor or looking through endless quotes from furniture dealers for ergonomic work stations when someone can do it for you? Especially when that someone is an office set-up expert and has your best interests in mind.

How exactly does this “free” concierge service work? (We’re serious, it’s free…)

1. You’ve leased a new space – yay! Now what?

2. Contact an OfficeSpace.com Concierge and let them know what kind of space you have (office, retail or industrial) and it’s size.

3. Your concierge will then ask you a few short questions to assess what your company is going to need to get started.

4. Voila! You’ll receive a tailored list of qualified and trusted vendors eager to get your space open for business. (FYI – They’ll be expecting your call as our concierge monitors everything to make sure your office set-up runs smoothly.)

Can’t wait to get started – call your OfficeSpace.com Concierge today.

concierge@officespace.com | 800.614.2154

P.S. No office is too small or too big for an OfficeSpace.com concierge…

“Good Fortune Comes to San Diego Commercial Real Estate Community…”


San Diego, CA Friday November 9, 2012 – Commercial Real Estate’s latest game changer, OfficeSpace.com, is now officially available in the San Diego market targeting both brokers and tenants.

The company’s unique position to be the next generation, all access platform for office space aims to streamline the commercial real estate process.


Having already garnered attention for their creative introductions in each market,  San Diego is no different with over 600 custom gourmet fortune cookies sent to the majority of brokerages through out the community with varying personalized fortunes.

OfficeSpace.com offers a multitude of services targeted to assisting brokers; landlords and property managers connect to tenants. The broker-and-landlord-to-tenant service is completely free for brokers and landlords to list. It also includes an extensive suite of free, timesaving tools created specifically for today’s market with options to design flyers, create surverys and communicate with tenants. Tenants are offered full complimentary access right at their fingertips with user specific designated search options, map functionality, social media sharing tools while also providing helpful tips on the confusing aspects of leasing.

“We are excited about providing service in San Diego. Tenants now have access to the
information they need to make better decisions about their businesses. We also provide a
robust tool set for brokers in order to compliment their marketing efforts and connect them
to tenants.” – Susie Algard – CEO, OfficeSpace.com
About OfficeSpace.com

OfficeSpace.com’s innovative service will help add great value to the San Diego Commercial Real Estate Market. Other markets include Denver, CO and Portland, OR. To add a listing, find an office or find out more visit OfficeSpace.com

History OfficeSpace.com

Experienced internet entrepreneurs Susie and Alex Algard purchased OfficeSpace.com in late 2010. Frustrated by some of the trial and tribulations of their own experiences trying to find office space for companies they were involved in, they decided it was time to make a change in the commercial real estate space. Susie, CEO of OfficeSpace.com, was previously a senior executive and founding member at WhitePages.com, a top 30 internet property.
OfficeSpace.com also operates one of the leading commercial real estate marketing and analytics services in Seattle, Portland, Denver, Minneapolis, Cincinnati & Columbus.

OfficeSpace.com’s Seattle Office Market Q2 Quarterly Report

OfficeSpace.com released its Seattle Office Market Q2 Quarterly Report today to a steady market and significant office expansions.

Vacancy rates have remained steady rising slightly from 14.4% in Q1 to 14.5% in Q2 while rental rates increased slightly from $25.83 to $26.38 respectively.

The biggest change in Seattle is the anticipated major office expansion from Amazon.com in the Denny Regrade neighborhood. This expansion is expected to add 3,000,000 square feet of class A office space. Additionally, Seattle mayor Mike McGinn has proposed increasing the office tower limit to 240 feet, up from the current 124 feet in South Lake Union.

To purchase this report for more information on major expansions and a breakdown of absorption rates by submarket, please contact John Heimbigner at heimb@officespace.com.