The Basics of Leasing Office Space

Finding the right office space is a big step for any business that wants to grow and succeed. For small businesses, entrepreneurs and startups, this can be a daunting process. But having a space that aligns with your business goals and supports productivity can make all the difference. The experts at Oxford Companies aim to simplify the process of leasing commercial office space and provide practical tips to help you make informed decisions and find the right space for your business to thrive.

Why Leasing Office Space Is a Smart Move

Leasing office space is great for small businesses and startups that don’t have the budget or resources to buy property outright. The flexibility of leasing allows companies to adapt to changing needs like scaling up during growth or downsizing during tough times without the long term commitment of ownership.

Leasing typically requires lower upfront costs compared to buying, so you can free up funds for other important areas like operations, marketing or hiring. This flexibility and financial accessibility makes leasing an ideal solution for businesses that want to establish themselves in a competitive market.

Lease Agreement Types

Businesses should understand the different lease types and choose one that suits their financial and operational needs. Below is a breakdown of the lease types and their features:

Gross Lease

Tenants pay a single fixed rent amount that includes most costs like property taxes and maintenance.
- This type of lease is simple and helps tenants forecast their monthly expenses.

Modified Gross Lease

Costs are shared between tenant and landlord, with specific expenses like utilities or cleaning negotiated separately.
- Gives tenants flexibility to manage certain costs independently without full responsibility.

Triple Net Lease (NNN Lease)

Tenants are responsible for additional expenses like property taxes, insurance and maintenance beyond basic rent.
- Provides long term control and stability for tenants who want to manage these aspects directly.

These lease structures vary in cost allocation and control, so businesses can choose an agreement that fits their priorities and financial strategy.

What is Rentable Square Feet (RSF) vs. Usable Square Feet (USF)?

To decode Rentable Square Feet, you need to understand how it’s calculated and its impact. RSF includes both the usable square feet of an office space, which tenants exclusively use, and a proportionate share of common areas, like hallways, lobbies, restrooms and other shared spaces.

The key things buyers should focus on are:

RSF directly impacts leasing costs: tenants are charged for both their private space and the shared areas.
Knowing the load factor: the percentage of RSF that is actually usable space helps to assess the value of the lease.
For example, a 1,000 USF office with a 20% load factor (common area allocation) will be billed as 1,200 RSF.

Choosing the Right Office Space

Choosing the right office space is a big decision that can impact a business’s operations and growth. By knowing your business needs, such as location, size and amenities, you can narrow down your options.

Evaluating your budget is equally important, not just the base rent, but also the other costs—furnishing, moving expenses and utilities. Review the lease terms to ensure it aligns with your business requirements for flexibility or scalability, for future growth.

And finally, conducting thorough tours and asking detailed questions about the space helps you make informed decisions so the office space you choose fosters productivity and aligns with your goals.

Building Community in a Shared Office Space

Shared office spaces provide a great opportunity to build relationships and community. With shared amenities like communal kitchens, lounges or coworking areas, people from different companies or industries are brought together, encouraging interaction and collaboration.

These spaces are great for networking where professionals can exchange ideas and share resources. Being part of a community driven environment can also create a network of like-minded people which is valuable for small businesses and startups that want to grow and innovate together.

Get Started with Leasing Office Space

To get started with leasing an office space, reach out to experienced professionals at Oxford Companies, who can simplify the process and help you make informed decisions. We can help evaluate your business needs, recommend locations and ensure lease agreements align with your goals. We specialize in supporting Ann Arbor startups and small businesses, with tailored solutions to help you find the perfect office space. Our team will handle the complexity, so you can focus on growing your business.

Conclusion

Ready to take the next step or need more information? At Oxford Companies, we’re here to help you find the perfect office space and provide expert advice tailored to your business. Reach out today to find your perfect office space!