Tips for Negotiating a Commercial Lease

Lighting up the “open” sign on any business is preceded by many arduous hours of preparation, planning, negotiating, budgeting, and an infusion of capital. The stakes are high when beginning or expanding any business. A significant factor in putting any retail or commercial enterprise on a path towards successful profitability is finding the right commercial property for rent. 

Unlike the month to month rent of residential units, entrepreneurs must find a commercial space for lease which locks in a reasonable amount of time for the business to succeed.  When searching for a commercial property for rent, time commitments are an essential part of the lease. Opening any commercial or retail enterprise comes with investments in building out the infrastructure of the commercial space. 

Once found and secured the commercial property for lease must be built out to accommodate the commercial or retail enterprise that will occupy the space. This makes the initial term as well as the options for extensions of the commercial space for lease an essential consideration that can make or break the chances for success of any business. 

If the commercial property for lease does not offer an initial term that makes the build out investment economically reasonable, it will affect the success or failure of the business which occupies the space. Likewise, without contractual terms of lease extensions built into the initial contract for the commercial space for rent, the business cannot plan for success.

Both sides, the lessor and the lessee of commercial properties have a vested interest in securing a known, predictable time for the occupancy. Both sides of the commercial property lease need to take part in negotiations for a successful contract for all. Entrepreneurs looking to secure a commercial property for lease should consider these essential tips when negotiating with landlords, owners, or brokers.


After finding your “perfect” commercial space for lease, and before you begin negotiations, know specifically the limits of your budget. Unlike residential rentals and leases, commercial properties include many other expenses along with the rent payments. Learn about the types of commercial leases. 

Types of Commercial Leases

The negotiation of a commercial lease may involve representatives of the landlord, owner, or potential tenant. In the end these representatives will not be signing the contract, it will be signed by the interested parties, business tenant and the landlord, owner, or corporate officers of the owners. Therefore, it is important as a commercial lessee that you understand the terms, conditions, and financial obligations of the lease. A commercial lease is a legally binding document between the business tenant and landlord with specific financial obligations, even in default. 

Understanding the type of lease is a major factor in determining the costs for utilizing the commercial space. The most common type of commercial lease is:

  • The Net Lease With a Net lease, the tenant is responsible for a base rent payment PLUS, additional expenses. These additional expenses might include: 
  1. Utilities               
  2. Insurance
  3. Property and or Building Maintenance 
  4. Real Estate Taxes

A Net Lease comes in many forms. These include the Single, Double, Triple, Full Service Gross Lease along with the Bondable Net Lease, and others. Each type of lease lays different financial responsibilities on the tenants and owners while the commercial space is rented. 


Know the base rent that makes the commercial space for rent workable for you. Vacancies in commercial property for lease are not good for property owners, so there may be a willingness to negotiate. Do not just look at the price per month when calculating rental rates. Concessions like free or discounted rent during the build out can add up to an appreciable discount. 


Negotiating the rent goes hand in hand with base time of the lease as well as extensions, and terminations. In some cases, committing to a longer time frame, can lead to lower monthly rent payments, or a guaranteed rent at renewal. Owners and landlords prefer occupied buildings. 


Lock in renewal terms and rents by spelling them out in clauses of the initial lease agreement. Typical commercial property for lease terms may include a multi-year lease with an automatic renewal at a specified term and base rent. By extending the initial lease term and renewals, the tenant offers the landlord or owner the security of an occupied space for a longer guaranteed time. This may help in negotiating a favorable rent rate. 

To Find a Commercial Space for Rent – Search, Budget and Negotiate

Everyone searching for a Commercial Property for Rent must be prepared in many ways. Finding the right commercial space for rent is only the beginning. Many have heard the mantra of real estate, Location, Location, Location. When it comes to the commercial space for rent, the location is dictated by its use. For commercial retail spaces, traffic, visibility, and accessibility may be the most important factors in finding the right commercial property for lease. While for other businesses looking for commercial office space, manufacturing or warehouse accommodations, the right location has different parameters. Once you have found the commercial space for lease that best meets your requirements, preparing a concise budget and negotiating a lease which stays within its limits are essential.

Commercial property for rent, offers many options. Base rents, time, renewals, early terminations, sub-leases, co-leases; co-tenancies are all factors that need to be nailed down. It is seldom a “buyers” market for commercial real estate with a great location and amenities but the savvy renter should be able to find a good fit, after doing some research.

Best Ways to Find Commercial Space for Rent

Best Ways to Find Commercial Space for Rent

Finding office space for rent isn’t always as easy as one might expect. Jumping at the first available office you see might seem like the easiest route, but be careful with that – the terms of those offices for lease may end up being unattractive and expensive. When you rent an office for your business, you are paying for much more than space; instead, you are making an investment into a space that will help your business thrive and improve your bottom line. If you’re in the Clifton Park area, here are some tips you can use when looking for a commercial property for rent. 

Network with Business Owners

First of all, it is never a bad idea to reach out to other business owners and ask them about the office space they are leasing. Many are often aware of available office space or of commercial property that is going to be available soon. Business owners – especially small business owners – talk to each other and get information on the businesses and properties around them. You can search for business networking groups in Clifton Park or you can join online forums and Facebook groups geared towards small business owners helping one another. 

Perhaps the most valuable thing when talking to other business owners is that they can describe their own experiences with certain landlords and property owners. The owner that leases space to tenants is more crucial to a business’s success than one might think. “Bad” property owners can cause drama and issues that interfere with your ability to run your business, so if several local business owners give you negative feedback on a certain owner, it might be best to steer clear. Positive reviews of owners, on the other hand, can make your final decision much easier. 

Drive Around the Market

You could walk, too. Simply getting in your car or scouring the area on foot looking for office rentals is never a bad idea and will give you an idea of what your office might look like and the areas you think it would be the most successful in. Driving and walking around the areas will allow you to locate office rentals that you may not be able to find online or through networking. While this may seem sort of boring, it is a critical part of your business’s future.

Ask questions, too. If you come across a busy commercial building that has one or two offices boarded up, try to find out why. Oftentimes, there is nothing wrong with them and they are just not leased at the moment so they may be the perfect fit for you. Of course, we often see “For Lease” signs all over, so calling the numbers and talking to the owners/landlords may give you a sense that you have found the right property. 

What to Know Before Signing That Commercial Lease

There are many factors you need to know the ins and outs about before you pick the right commercial space for rent. First and foremost, don’t settle. Take your time (if you have it). Choosing office rentals is kind of like closing on your new house – it is an investment that needs to be made carefully. Good property owners will understand if you need to take a couple extra days to look over the lease agreement again before signing it, and they will also not be offended if you decide to have a contractor come assess the property, too. Be sure to know the tenant rights in your area, too.

Many owners will also understandably tack on more fees in addition to the rent, which can include everything from landscaping to cleaning and utilities. Commercial leases normally identify these as “TMI” in your lease agreement – it stands for taxes, maintenance, and insurance. While these are normally reasonable and fair, you need to read through them thoroughly to make sure. If you have an attorney, it might be worthwhile to have him or her look through the terms as well. 

If  the terms of the lease are not clear or if  the owner makes you feel uneasy, it might be best to walk away. Even if you think the first place you look at is “the one,” you may still want to keep looking. Visit a few places, do your research on the various neighborhoods you might want to lease an office in, and stay open minded.

Overall, it takes time to find the right commercial property for rent, so prepare for that when you are looking for a new space for your business. If you network enough and do in-depth research and due diligence, you should definitely be able to find the right space for you. 

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How Much Does It Cost to Rent Office Space?


Whether you have an established small business or you’re a solopreneur just getting started, you can benefit from renting your own office space. Having a dedicated office space for your company can help you be more productive and provides a professional space to hold meetings in. The cost of your office space can be one of the largest expenses you’ll take on as a business, so it’s important to budget for it ahead of time. Here’s what to expect when renting an office space. 

Benefits of Renting an Office

The internet has enabled workers in many industries to start working from home, but there are still so many benefits to working in an office. Many people find that having a dedicated office space helps them be more productive. Being away from the distractions of home, like family and hobbies, can make it easier to work efficiently. 

Having a dedicated office space can also be incredibly important for work-life balance. When you work from home, it can be difficult to separate work and leisure time. For many people, this means it’s harder to rest and recharge. With a designated office space, you can set a defined work schedule that leads to a more comfortable work-life balance, with more time for family, friends, and hobbies. 

If your business has multiple employees, working in an office is also one of the best ways to foster a strong community culture. It’s much easier to collaborate, be creative, and solve problems when you are all working together in the same space. Working together every day also helps your team develop a strong bond and keeps morale high. Working in a group also helps your team learn from each other, so you can all expand your skill set and get more done. 

How much does office space cost? 

The cost of an office space can vary depending on where you live. Office space rental prices are typically calculated by square foot. This means that larger offices will cost more per month. Commercial offices may have longer leases than residential properties. Some leases are paid monthly, while others are paid on a yearly basis. 

Office space rentals in the US average anywhere from $1 per square foot up to over $6 per square foot per month. The cost of an office space is dependent on several different factors, including the location and the quality of the office space. For example, newer office spaces with more amenities are typically more expensive than older properties. 

The average cost of office space in Clifton Park, NY is between $1 and $2 per square foot per month. This is fairly standard for office spaces in suburban and rural areas. However, the cost of an office space can go much higher in urban areas. For example, office spaces in New York City average over $6 per square foot per month, while San Francisco averages over $5 per square foot. However, other cities are more affordable, with Chicago averaging approximately $3 per square foot, and Atlanta and Dallas both averaging between $1.50 and $2 per square foot. 

The cost of a rental will also vary depending on where you are in the city. Offices in central business districts with access to retail, restaurants, public transportation, and parking will be more expensive than offices that are hard to get to or don’t have any shops or restaurants nearby. The crime rate in the area can also affect the cost of an office space – offices in high crime areas are often (but not always) more affordable. 

What to Consider When Renting an Office

There are so many factors to consider when renting an office. An office space is a major investment for your company, so it’s important to make sure that the one you choose is a good fit for your company. 

The first thing to consider is the amount of space itself. Generally, you’ll need between 75 and 200 square feet per employee. The exact amount of space you need will depend on your budget as well as the type of work you’re doing. If you need extra equipment beyond just a computer and a desk, you’ll need to make sure you have enough space for it. 

Of course, you’ll also need to make sure the office fits into your budget. This is a particularly important consideration for businesses that are just starting out. While office space can be expensive, you’ll need to make sure it isn’t a hindrance to your business. This may mean a smaller office space or sacrificing some amenities. 

You’ll also need to weigh the costs of a monthly lease or a yearly lease. If your company is growing quickly and you anticipate needing to move offices in a few months, a monthly lease will provide you the flexibility you need. However, a yearly lease can be a more stable option if you’re looking to stay in the same place for a long time. 

Finally, you’ll need to consider the amenities offered. Every company has different priorities when it comes to their amenities. For example, some prefer an office that allows 24 hour access with security. Other popular amenities to look for include a break room, designated meeting spaces, and secure parking. 

As your business grows, renting an office is the best way to ensure that your company has a safe, comfortable, and productive space to work.

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5 Things To Consider When Leasing Office Space

woman employee working in a commercial office space

A good office space is a very important investment for your company. It’s where you and your employees will be spending most of your working hours, so you’ll need it to be a space where you can feel comfortable and be productive. It’s also a space where you might be bringing clients, so it should be a good representation of your company and what you have to offer. With so many office spaces for rent, it can be difficult to find one that’s a good fit for your company. Here are five key things to consider when selecting an office space for your company.

1. Budget

The first thing to do when searching for an office space for rent is to determine how much you can afford to spend. If your rent takes up too much of your monthly operating costs, it will be difficult for your business to get ahead. On the other hand, you typically get what you pay for with office spaces, and if you aren’t willing to spend enough money, it will be difficult to find a unit that has the space and features that you need. 

The goal is to find a happy medium where you aren’t overpaying, but you’re spending enough to get the right fit for your company. Keep in mind that cheaper isn’t always better – in many cases, it’s financially efficient to spend a little bit more on rent in order to have a space where your company can truly be productive.

2. Location

Once you’ve come up with a budget, you’ll need to decide on an appropriate location for your office. In addition to having properties that fit within your budget, you’ll need to consider the convenience factor for both your employees and your clients. Think about where your employees live and how far they would need to commute to get to work. If you have employees that prefer to take public transportation, consider your proximity to nearby subway or bus stops as well. 

It’s also helpful to look for an office space with amenities nearby. This can help you attract clients as well as valuable employees to your business. For example, your employees will likely appreciate having a coffee shop on the same block, or a park nearby that they can walk to on their lunch hour. You should also consider the overall quality and atmosphere of the neighborhood and whether it fits with what you’re looking for. Do you prefer something in a suburban neighborhood like Clifton Park, that’s convenient and safe, or are you more interested in the hustle and bustle of a dense urban area? Both have their advantages and disadvantages, and it’s up to you to decide what makes the most sense for your business. Browse for more Clifton Park office rentals.

3. Utilities

It’s also very important to consider the utilities and other features that your office space can provide. In particular, it’s important that you have a reliable internet and phone connection. Many office complexes now include the cost of your internet connection in your rent, but not all do, so be sure to ask when you’re looking at office spaces for lease. You should also ask about the cost of basic utilities like electricity, water, and waste management, and make sure you understand how they are managed. Consider any other features the building has to offer as well – some office complexes will manage your mail for you or even have door security staff. These features can add extra value to your company.

4. Size

The size of your office space is another key factor to consider. Typically, the size of your office will directly correlate with the amount of money you spend in rent. It’s important that you have enough room for your employees to work comfortably. If your company is small and your employees can work in communal spaces, then you may be able to work in a tight space. However, if you need meeting rooms or individual offices for some of your employees, then it’s going to be worthwhile to invest in a larger space. 

It’s very important that your employees can work comfortably and that they don’t feel cramped while they’re at work. At the very least, you will need to fit every employee’s desks and chairs into the space and still have room to walk around. It’s also helpful to add in a comfortable reception area for clients as well as a break room for your employees. Remember, your team is going to be spending hours at the office every week, so it’s worthwhile to invest in a comfortable space.

4. Design and Atmosphere

The final thing to consider is the design and look of your office space. Remember that your office is a representation of your company, and you’ll want to make a positive impression. Consider the layout of the space – is it open and easy to navigate, or are there lots of confusing hallways? Do windows let in enough light, or does the space feel dark? It’s important that the office feels welcoming, or it won’t be a comfortable place to work

You’ll also want to find out how the property feels about customizing the office. Can you renovate to make the space more appealing? With more flexibility, it’s easier to transform your office into a space that really reflects your company’s identity. It can also help to research the other tenants in the building and see if your company fits in. The building will serve as the first impression for your clients, and the other tenants are part of that first impression. 

Finding the perfect office space can take some time. It’s important to consider many different options before making a commitment. Since your office space is such an important part of your team’s operations, it is worthwhile to spend your time and money in a place where you can really be productive.

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7 Hidden Costs of Running a Small Business

7 Hidden Costs of Running a Small Business

There are so many great things about running your own business. You get to be your own boss, and you can focus on products and services that you are truly passionate about. However, there are many hidden costs that come with running your own small business. Before you start your own company, it is very important to understand the financial challenges that come with being a business owner, so you can prepare accordingly. You likely already know that you’ll need to hire employees, get an office space for rent, and advertise your company. However, there are also plenty of smaller costs of running a business that you may not have considered. Here are seven hidden costs of running a small business that you’ll need to work into your budget.

Business Permits

No matter where you live, you’ll need to get the appropriate permits to run your business. Laws differ between cities and states, but generally you’ll need to pay for a permit to do business in your area. Depending on what industry your business is in, you may also need to pay for a professional license. These documents need to be renewed regularly, often every year or every few years. You’ll need to add these licensing fees into your yearly budget to ensure you don’t get blindsided by additional costs later on.


It is very important for your business to carry insurance. Not only is it required by law in most places, but it will protect you legally and financially in the event of an accident. You’ll need to pay for liability coverage to cover your customers and your employees, but it’s also worthwhile to invest in additional coverage for negligence and property loss. A good independent insurance agent can help you find an insurance policy that makes the most sense for your company, depending on where you are, what industry you’re in, and what kind of customers you attract. Make sure to budget for insurance payments each month to make sure you’re covered. Keep in mind that many insurance providers offer discounts for consistent customers. Don’t be afraid to negotiate with your insurance provider and ask them how you can save money.

Employee Benefits

You’ve probably already considered the cost of paying your employees’ salaries, but many people forget that they need to offer benefits as well. It’s important to offer your employees perks like insurance and paid time off, in addition to a fair salary. When employees are treated well, they are much more likely to stay with your company, which reduces turnover costs. You will also need to factor in the costs of training both new and existing employees. Investing in good training tools ensures that your employees stay productive as technology advances. You should also factor in the costs of hiring independent contractors as needed. Sometimes the best way to get something done is by using a specialist, which is where independent contractors can be very helpful. However, they can be expensive, which is why it’s so important to budget for this ahead of time.

Equipment and Maintenance

Every small business requires plenty of equipment to get started. Just furnishing your office rentals can get expensive quickly, as you’ll need furniture, computers, and printers, plus you’ll need to maintain a set of basic office supplies, including paper, pens, folders, and more. Of course, you’ll also need to purchase any equipment that’s specific to your industry. The cost of industry specific equipment can add up quickly, which is why it’s so important to factor this into your budget from the beginning. You’ll also need to add in the costs of maintaining your equipment, particularly if repairs need to be done by a specialist. A broken piece of equipment can quickly slow your company’s productivity to a halt, which is why it’s so important to include maintenance in your monthly budget.

Delayed Payments

One of the most aggravating things about running a small business is dealing with late payments. Maybe a customer’s card declines or their check bounces, or one of your largest clients simply forgets to pay their invoice. While it may not seem like a big deal to your customers, it can affect your ability to pay the bills. When possible, it’s important to put money away to cover potential losses in the future. You should also make sure you set clear terms with clients when setting up a contract, and charge late fees for missed payments. This can help you avoid cash flow problems in the future.


If your business focuses on selling physical goods, you’ll want to make sure you account for shrinkage when planning your budget. Shrinkage is a loss of inventory before it can be sold, and while you can take steps to minimize your shrinkage, it’s hard to prevent entirely. The best ways to prevent shrinkage are to keep very careful track of your supplier orders, and to make sure you’re doing regular inventory checks. Having a reliable system in place for tracking your orders will minimize your chances of experiencing inventory loss.

Loan Payments

It’s normal for business owners to take out a loan to get their company off the ground. However, your loan payments may end up eating away at more of your budget than you had initially bargained for. Loan payments can come with high interest rates, particularly if you don’t have good credit. If you miss a payment at any point, you can end up with late fees that hurt your budget even more. When taking out an initial loan, be sure to consider the long-term costs and how they might affect you going forward.

These hidden costs can make running a small business challenging, which is why it’s so important to include them in your business plan. Although running a small business can be expensive, it can also be very rewarding. Over time, you’ll learn how to budget for your business effectively to avoid cash flow issues and surprise bills.

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How to Avoid Common Commercial Leasing Mistakes

How to Avoid Common Commercial Leasing Mistakes

As a business owner, entering your first commercial lease can be both exciting and scary at the same time. Specifically, the process of leasing commercial space coupled with finalizing the lease agreement can be somewhat confusing to the novice business owners who have no experience with the process. The elements of a commercial lease aren’t all the same, so business owners shouldn’t erroneously assume that they will be. While there are state laws out there that deal with leases, very few of those laws apply to commercial tenants. As such, prudent business owners should conduct some research and study to avoid common commercial leasing mistakes.

Start your search at least six months in advance

Do not put off searching for commercial space until the last minute, or you will probably be disappointed. Typically, when searching for commercial space to rent under 10,000 square feet, tenants should start looking at least six months ahead of time. Truthfully, in some unique situations, it may be beneficial to begin searching for up to a year ahead of time. Additionally, the office space will probably need to be remodeled or renovated, so commercial tenants should factor this time into their scheduling and planning accordingly. As a general rule of thumb, the larger the space that your business requires, the longer time you should give yourself to find a space. Overall, you’re only doing yourself a disservice to your business by not allocating enough time to find a commercial space.

Understand your business and office space needs.

As a business owner, you should develop a plan and define your goals with your team. As you consider commercial space/office space, you should ensure that you are staying true to your “brand”. You should ask yourself questions such as, “does this space fit my company image?” “Does this space make the right first impression to my customers and clients?” “Does this space facilitate a happy company environment?” Additionally, together with your operations manager or team, you should think about your preferred layout. Consider whether you’re looking to create a collaborative office space for your team or desire private offices and whether you want modern office decor or traditional office décor etc.

Moreover, while searching for commercial space, you should hire an architect to get a clear understanding of just how much space your business needs. Specifically, an architect can clarify the office layout and design of the space to hone in on your office square footage requirement. Further, an architect can develop a plan that aligns with the company’s growth forecast and evaluate whether the office will still meet your company’s needs in 5 or 10 years. Overall, by enlisting the help of a professional architect, a business owner can avoid having too little space, which is terrible for employees or having too much space, which is costly.

Double Check Your Monthly Operating Expenses

Most commercial leases charge each tenant a base rent amount as well as a percentage of the building’s monthly operating expenses, which typically includes common area maintenance charges (CAM). CAM charges are the building expenses that each tenant benefits from; they include things such as garbage removal, janitorial services, security services, etc. Make sure you know precisely what items make up your additional costs each month before signing your lease. Lastly, do not forget about the Real Estate Taxes. As a business owner, you should make sure you understand what percentage of the building’s real estate taxes that you will be responsible for paying. Specifically, make sure you understand and agree with both the proportional share as well as what effect an increase in taxes will have on your portion of the real estate taxes under the lease agreement.

Hire a Professional Team

In addition to hiring an architect, companies should also consider hiring an engineer and a lawyer. For larger companies, a project manager may also be needed to facilitate the lease agreement. The project manager can serve as a single point of contact for the business. Specifically, the project manager will work with all departments, including human resources, finance, and IT departments, throughout the leasing process.

Conduct Due Diligence

One common mistake with a commercial lease is the business owner’s failure to conduct due diligence on the property. When business owners are excited about leasing new space, they sometimes tend to overlook red flags or cut corners altogether, which can be a costly business mistake. Once you find a space that you are interested in, you must conduct due diligence on the property to ensure that the office meets your business needs. As such, business owners should get basic things inspected, such as the property’s electrical wiring, and plumbing. The building’s mechanical infrastructure, including the HVAC system, should also be evaluated, especially in older buildings. Overall, all appliances and equipment should be inspected, even if the landlord says they are all in good working condition. Lawyers and engineers can work together to confirm that the office space meets all safety codes and is ADA compliant.

Evaluate the Location, Location, Location

Location can be a business asset or liability. Business owners should be very familiar with the location of their new commercial space. Business owners should strive to make the location as convenient as possible for employees who rely on public transportation to commute to work. It is also advisable that business owners consider amenities in the neighborhood. Are there coffee shops around or quality restaurants nearby for lunch on places to entertain clients? Lastly, business owners may want to consider the safety of the neighborhood to ensure that they are not compromising safety for a lower price.

Overall, business owners must have a plan and be disciplined throughout the leasing process. Owners should be obsessive about planning, clarifying objectives, poring over lease details, and hire a team of experts to have a positive commercial leasing experience.

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What Percentage of Revenues Can you Expect to Pay for Commercial Rent?

What Percentage of Revenues Can you Expect to Pay for Commercial Rent

One of the most substantial operating expenses for a brick and mortar business or any business that requires office space is the cost of renting commercial space.  Before searching for office rentals, you must understand what expenses you can expect to incur.

The cost of commercial property is dependent upon numerous factors, including the city, location, and size of the commercial space that you are seeking. In this article, we will briefly discuss the various cost associated with commercial leases and the calculations that you should conduct prior to committing to a commercial lease.

Commercial Property Rental Rates

During your search for commercial property to rent, you will see advertisements, which may include figures such as “$50/SQFT.” This figure means that the rent is fifty dollars per square foot per year. Once you know the square footage of the commercial office space, you can then estimate your annual and monthly rent cost. In general, it is recommended that you allocate a minimum of 100 SQFT per employee. As such, you can calculate the number of employees you have (or expect to have) to estimate how much office space you need.

However, please note that this is just a starting point ora basic rent calculation, which is the cost before other expenses (i.e., utilities, maintenance fees, etc.) are calculated. Additionally, the building that the office rental is located in will impact the additional cost that you may incur. For example, a building with a doorman or luxurious lobby will increase the cost of the office rental.

In any event, your lease will define the additional costs you’re responsible for, but as explained below, each type of commercial lease agreement is different.

Different types of commercial leases

A gross lease is where the tenant pays a flat or fixed amount of rent, and the Landlord is responsible for expenses incurred in operating the building. As such, the Landlord pays the taxes, insurance, special assessments, etc.

A net lease is where the tenant pays the rent, and some defined percentage of the taxes, insurance, and maintenance fees.

A double net lease is where the tenant pays the rent, taxes, and insurance.

A triple net lease is where the tenant pays the rent, taxes, insurance, and operating cost. The triple net lease is commonly used in shopping malls. 

A percentage lease is where the tenant’s rental rate is based in part on the gross sales made by the tenant on the premises. (e.g., a landlord receives $1000 per month and base rent and 5% of the total monthly profit). Percentage leases are commonly used in retail spaces

Step rent commonly referred to as “step-up rent” or a “step-up lease” is a clause in a commercial lease agreement where the rent may increase at specified periods during the tenancy.

For example, a step-up clause may indicate that the rent will increase by $100 per year to account for inflation. The methodology used for calculating step-up provisions varies from lease to lease. For example, the additional rent can be calculated as a fixed dollar amount, or it might be a percentage increase tied to a consumer price index, etc.

Your broker can help negotiate the terms of any rent increases or step-up rent provisions.

Usable Square Footage vs. Rentable Square Footage in Commercial leases

To avoid confusion during your search for commercial space, you must remember that there is a difference between the usable and rentable square footage of commercial space.

Usable square footage

Usable Square Footage only includes the square footage that is exclusively for use by you, the tenant. The usable square footage calculation is what you should use to determine whether a potential space will meet the needs of your business. Typically, an office rental’s usable square footage isn’t advertised.

Rentable Square Footage

Rentable square footage includes usable square footage plus a percentage of all the shared office space in the building. This calculation contains things such as shared restrooms, cafeterias, the lobby, and stairways that your employees can use. Additionally, rentable square footage also includes areas that the tenants do not have access to, such as maintenance areas.

More than likely, in a commercial lease, the monthly rent will be calculated based on the rentable square footage, as commercial tenants are expected to help cover the cost of maintaining the entire building.

Loss Factor

Once you are familiar with the useable square footage and the rentable square footage, you can then calculate the “Loss Factor,” which is the percent difference between the usable square footage and the rentable square footage.

(RSF – USF) / RSF = Loss Factor

Essentially, the loss factor equation indicates the total “markup” on your monthly or annual rent. The Industry standards for Loss Factor vary by location and industry, but anything over 40 percent is usually considered excessive.

The Cost of Building Out an Office Space to Meet Your Needs

Unless you’re lucky to find space that already fits your needs, you may need to build out the commercial space you’ve chosen to meet your business needs. For example, you may need to transform a former restaurant into a retail space or vice versa. Sometimes, Landlords may contribute to the cost of renovations by offering rent concessions to give the tenant time to build out space before opening for business.

How to Calculate Your Target Rent Based on a Percentage of Your Gross Income

To ensure that you are keeping your rental cost reasonable, you can calculate your target rent amount as a percentage of your gross income. The standard gross-to-rent rate varies amongst different industries but is typically under 10 percent.

According to Hartman, one of Houston, Dallas, and San Antonio’s premier property management companies, the following are examples of standard gross-to-rent percentages from a variety of industries.

  • 46 percent: Gambling establishments
  • 12 percent: Gas stations
  • 09 percent: Electronics and appliance stores
  • 66 percent: Educational services
  • 82 percent: Finance and insurance companies
  • 19 percent: Arts, entertainment and recreation facilities
  • 21 percent: Food and beverage shops
  • 30 percent: Books, hobby, music, sporting goods stores
  • 37 percent: Health and personal care stores
  • 46 percent: Insurance agents and brokers
  • 86 percent: General merchandise stores
  • 52 percent: Health care and social assistance organizations
  • 81 percent: Food and drink establishments
  • 98 percent: Furniture and furnishing stores
  • 7 percent: Hotels, accommodations
  • 66 percent: Clothing and accessory shops
  • 55 percent: Ground transportation companies

How to Calculate the Percentage of Your Sales that will go towards your rental expenses

To calculate what percentage of your gross sales will go towards your rental expenses, use the following equation:

(annual rent/yearly gross income) =Percentage of Your Sales that will go towards your rental expenses

For example, let’s say your rent is $1,000 per month, and your gross annual income is $240,000.

  1. First, calculate the annual rental cost. ($1,000 *12) = $12,000
  2. Next, divide the annual rent by your gross annual income

If your annual rent is $12,000, you would then divide $12,000 by $240,000. ($12,000/$240,000) =.05

Your total would come to 5 percent

This percentage means that for every $1 your company earns, 5 cents go toward the rent.

Knowing this calculation is critical to determine the maximum amount of rent you can comfortably afford for your business. Specifically, this is helpful if you are looking to upgrade your commercial space, but you want to ensure that you still meet your income goals.

Featured Image Credit: By The Photographer / Own work, CC0

Can an office space really be both fun AND productive?

Can an office space really be both fun AND productive?

Decades of rigid workplace policies have conditioned us to believe that there is no way work and play can co-exist. We were taught to believe that fun doesn’t belong in the workplace. You come, get the job done, and leave. But how effective has that approach really been? The reality is that businesses that lack focus on their employees’ well-being tend to experience high employee turnover rates and small profit margins. Or, they simply fail.

There is a misconception that employees are easily replaceable. However, hard-working, loyal employees are a dime a dozen. So it’s in your best interest to take good care of your employees. After all, a productive human resource is the driving force of any successful business! Gallup’s State of the Global Workplace Report indicates that throughout the world only 13% of the employed population is engaged at work. The large remainder is either actively or inactively disengaged; emotionally and mentally disconnected from their work; and highly unlikely to be productive. This can lead to companies losing billions in profitability.

Fun at Work = Happy Employees = Increased Productivity

Employee well-being is at the heart of workplace productivity, but what really influences an employee’s level of satisfaction and engagement?

Work Environment

When selecting an office space for rent, look for one with proper lighting and room temperature, and appropriate facilities, an open office space for your employee. Purchase high performing equipment and develop efficient processes to enable employees to effectively manage their workload. These factors contribute to a conducive work environment to ensure your employees are comfortable. Office rentals in Clifton Park (NY) are specifically designed with a healthy workspace in mind. The office spaces can be customized to suit your specific business needs and give your employees the ability to have fun while they work.

Flexibility at Work

Flexibility here does not refer to mastering your yoga poses, although exercise at the office is not a bad idea when it comes to employee wellbeing. However, flexibility at work refers to:

  • Differentiated spaces – Designate specific spaces for work, relaxation, and collaboration to help boost employees’ mental and emotional health. If space is limited, you can equip one room with gaming equipment, a large TV or monitor, and a pool table. If possible, create a gym area that could also convert into a yoga/Zumba space. Utilize outdoor workspaces so your employees don’t feel trapped indoors all day.
  • Break and/or nap time – Who doesn’t love the occasional break! Employees who work from 8 to 4 or 9 to 5 tend to experience burnout by the afternoon. They tend to be less engaged and less productive. Introduce a 20 to 30-minute break or nap during the day so employees can recharge for the afternoon period.
  • Listening to music while at work – Incorporate music in the office to help your employees stay focused and motivated to be more productive. Your music choices may be soft classical sounds, instrumental pieces or whatever is most suitable.
  • Flexible working hours – Before your employees enter the office, their stress levels may be high. One reason for this is traffic. There’s nothing more stressful than the rush hour commute. Offer your employees the option to work outside of their usual hours or from home some days.
  • Uninhibited employee interaction – Create an environment where your employees feel free to interact with one another. This helps to build camaraderie and improves teamwork.

Workplace Ergonomics

A desk and chair combo molded to cradle the spine and nurture proper posture is fantastic. But innovative seating arrangements like a hammock, or standing desktops take the quality of a person’s day up a few notches. They also help reduce the chances of obesity and other health issues associated with sitting at a desk for long hours.

Dress Code

Some companies enforce a uniform policy for employees. But is anything wrong with employees expressing a little individuality through their attire? Can they dress comfortably and still be productive? Uniforms have their place, but they may not be essential for all environments. Granting your employees a flexible dress code may improve their productivity if they are allowed to be themselves.

Team Building

Taking your team out to a restaurant, encouraging recreational activities, and sharing jokes and stories are some ways to boost staff morale. There’s also no excuse for not having group activities when you live in Clifton Park (NY). With outdoor activities like scavenger hunts and sporting games, there’s always something fun to do to inspire your team beyond the office walls.  

Let’s face it. As a business owner, you can’t just take a commercial space for rent, stick a bunch of people in it, and have a productive team overnight. Statistics show that there is a direct correlation between employee happiness and productivity. For example:

  • Companies that actively focus on employee happiness experience greater profitability than those that don’t by 20%.
  • Employees who feel included are 4.6 times more motivated to perform at their best.
  • Companies that have wellness programs are more likely to be recommended by their employees as a great place to work.

All work and no play makes everyone dull, and maybe even disengaged. Providing employees the balance they need is mutually beneficial to all since happy employees affect your bottom line. Fun and productivity can work hand in hand, and efficiently at that. The work family that plays together, stays together!

Featured image credit: Split the Kipper / flicker

5 Ways to Engage Employees in the Workplace

5 Ways to Engage Employees in the Workplace

by J.T. Taylor, M.A. – President, Team Building USA

Today’s job market is getting very competitive and keeping your best employees and attracting new talent is critical for success. So, what are some cost-effective ways to keep your employees engaged?

Here are five proven engagement strategies for your company:

1. Team Building with a Corporate Responsibility Focus

That’s right Team Building events are a fantastic way to boost morale, increase camaraderie and even give back to you community. Many team building companies offer events such as: Bikes for Kids, Food Bank Charity Challenge or Project Backpack – all of which result in needy children in communities across America – from Santa Ana, CA to Clifton Park, NY, receiving much needed resources as a result of your company investing in its own people.

2. Sincere and Meaningful Praise

In a recent study, employees were asked “What Motivates You the Most in the Workplace?” One would think “show me the money!” would be the top answer, but no, money came in at number three. First was, “making a genuine difference”, and second was “being appreciated for what I do.” Being kind and encouraging is easy to do and it cost virtually nothing and by giving sincere and meaningful praise you are motivating and inspiring your employee.

One manager I know of did something really nice for his assistant. Their business was growing fast and they needed new office space for lease, so after they spent all afternoon looking for offices for rent, they settled on a wonderful commercial space not far from their present location. The next morning the assistant walked into her office and found a bouquet of flowers sitting on her desk with a thoughtful “thank you note”. She walked on cloud nine for the rest of the day. Words and gestures of appreciation have an impact!

3. Solicit Employee’s Ideas

No one wants to be treated as if they are a cog in a machine. All of us want to contribute our talents and abilities to a meaningful cause. What employees do at work is no exception. So, give your people opportunities to improve things around your projects.

Using our previous example from Sincere and Meaningful Praise, before the Manager and his Assistant went looking for office space for rent, they gathered the 25 or employees who would be most effected by the move for a brainstorming session. At the top of the white board the question was posed, “Should We Pursue Offices For Lease, Or Offices To Purchase.” The ensuing discussion delved deep into the cost and benefits of each. Employees were able to see how much more expensive purchasing office space was and what benefits they would be giving up, verses moving to offices for lease. This helped the employees buy-in to the move and engage more fully in the process.

4. Create Advisory Committees

When there is frustration, disagreement or disgruntled employees around an issue, one of the best ways to tackle the problem is to create a committee to come up with solutions to the problem. Select a strong leader, who is a good listener to lead the committee and make sure your most vocal and influential frustrated employee is on the committee. Once the ideas come out of the committee, that negative person will have no occasion to complain about the solution since they were part of creating it. A good leader will ensure everyone’s opinion is listened to and understood. They can incorporate any positive elements they can find into the final solution and liberally share credit for all the contributions. People need to be listened to and taken seriously. This approach will boost morale and enable a much greater degree of buy-in and engagement then simply announcing a decision from the top down.

5. Delegate, Don’t Dump

Too many managers off-load their work onto subordinates just to reduce their workload. This is a giant mistake. Delegation done correctly is a fantastic opportunity to develop leadership in others. Using our office rental example there are a number of ways this could have been done:

  • Manager makes the decision all by him or herself on what commercial space for rent to select. This is a top down, authoritarian move which does nothing to develop any new leadership and creates disengaged employees
  • Manager involves only the key stake-holders in selecting which commercial property for rent the team would move into. Key stake-holders are important players to involve since they sell the decision to the rest of the team. Putting one or two of them in charge of various parts of the move is a great way to develop new leadership.
  • Manager delegates the decision fully to others with carefully thought through parameters and see what solutions the team comes up with. A move that effects everyone, should involve everyone. When a team is considering which office for lease they are going to commit to, that effects everyone. So, take advantage of the impending move and empower rising talent to tackle the challenges involved.

These are five simple ways to engage your employees and they work! You’ve got good people, trust them, develop them, encourage them and reward them. A good leader inspires his or her team to perform their best. They do this by caring about and trusting their people. These are just five ideas on how you engage employees in the workplace and they work!

Featured Image Credit: rawpixel / Pixaby

City vs. Suburban Office Space For Rent

City vs. Suburban Office Space For Rent

When deciding where you want to rent an office space for your company, you essentially have two options to choose from – an urban office in the city, or a more relaxed suburban campus. There are pros and cons to both options, and what works for one company may not work as well for another. Here’s what to keep in mind when deciding between an urban or suburban office space for rent.

Millennials Love Urban Spaces

One of the biggest arguments for keeping your office in the city is simply that millennials love living and working in urban areas. An increasing number of millennials are choosing to abandon their cars in favor of public transit or rideshare services, and it’s easier to do this in a downtown area. They also tend to enjoy living and working in areas with a vibrant community and lots of fun things to do. While there are some suburban locations that offer these things, it’s easier to find them in a big city. And as the millennial generation gets older and are becoming more experienced and valuable employees, choosing an office in an urban area can help you recruit them. It’s also worth noting that many older employees are moving back into the city after their kids move away to college, so urban office rentals will appeal to them as well.

Suburbs Are More Affordable

Although urban spaces are very desirable right now, offices in the suburbs are much more affordable. You’ll pay significantly less per square foot for office spaces in the suburbs when compared to office spaces in urban areas, which are much more expensive. Suburban offices for lease are also typically larger, and in some cases you’ll even get better amenities for your money. For example, in a suburban building, you might have more room for an open office plan or even a large break room for your employees. In the big city, where your space is limited, you might not be able to offer the same quality of space. You should also keep in mind that most big cities charge income taxes on the businesses there, but many suburban towns do not. If you can find an office in an area that does not charge income taxes, it will dramatically increase your company’s overall revenue.

The Parking Conundrum

Another thing to take into consideration when choosing an office space is the parking. If you live in an area where most people take public transit, then this won’t be a problem. However, if most of your employees like to drive to work, then the parking will be just as important as the office space overall. In big cities, many offices don’t have their own parking garages. This requires employees to find street parking and leave their cars in a vulnerable position, or pay for expensive parking garages. Suburban offices, on the other hand, often offer free parking in large, secure lots. In fact, they often have so much parking that your company will have spots for guests. If most of your employees drive, they will appreciate having designated parking spots.

Ultimately, it’s going to depend on your company and what makes the most sense for your needs. You will need to decide what features are most important to you when choosing a commercial property for rent. However, there are some strong benefits to working in suburbs like Clifton Park, NY that many companies don’t consider. If you’re on a budget or just have employees that love suburban living, you might be pleasantly surprised by how well a suburban office space works for your needs.

Featured Image Credit: Clker-Free-Vector-Images  / Pixabay