With the struggling economy forcing everyone cut costs wherever possible, many small-business owners are working from home. But building and maintaining a professional image is vital to entrepreneurs’ credibility, and taking advantage of fully furnished, move-in ready executive suites is often an inexpensive option.

Before you take the plunge, however, you’d be wise to consider the five questions below to ensure executive suites are right for you, and if so, that you’re getting the best deal.

Questions to ask yourself:

1. Is it crucial that all of your employees work on-site, or can some telecommute from home? This will in part determine how much space you need and how often you need it.

2. How much “address” can you afford? You know the real estate mantra location, location, location, and it’s true that prime locations (financial districts, upscale shopping districts, etc.) cost prime dollars. But with executive suites, you can often procure a prestigious address without the prestigious cost.

3. If your business changes drastically (either growing or shrinking), are there options to expand or shrink your space if the need arises? To avoid paying extra fees, get the management company’s policy about changing space needs.

Questions to ask the facilities management company:

4. What services are included with the executive suite lease, and are there extra charges for certain services? These can include services like reception, catering, meeting, conference and training rooms and courier services. They also may include access to business equipment such as broadband, WIFI, copiers, printers, telecommunications (phone number, fax, answering services and lines). Kitchen facilities are often part of the deal, as well as common areas and parking spaces. Sometimes extra services cost extra fees, but they still are usually a fraction of what you’d pay for permanent full-time services.

5. How does the lease work, and are there penalties if I need to break the lease? You could lose your security deposit, be denied access to the space, and even be sued if you break the lease, so be sure you’re committed to the length of the lease and the location before you sign.

By: Nathan Jansch

About the Author:
Nathan Jansch is owner and president of The Boardroom Executive Suites in Denver, Colo., which provides office space, virtual office services, conference room rentals, telephone answering, and other services and amenities to small and medium sized businesses. To compare executive suites to traditional office space or subleases, visit the Boardroom Executive Suites website. Read the Denver Office News blog for helpful business news and advice, financial and real estate news, and working green tips.

Whether the climate for office leasing is oriented toward the landlord or the tenant, the “business protection” aspects of office leasing prevail as a priority. Whether it is the large corporate office of a conglomerate, a regional sales office or a small private company office, there are few other opportunities in a company’s life to evaluate itself in such an intimate fashion than when it evaluates the need and use of office space. Economically, the costs associated with office leasing can be staggering.

For example, a firm leasing 10,000 square feet may be dealing with $4,000,000 in rent over ten years, expense increases of $75,000 Construction cost of $500,000, moving costs of $25,000, parking costs of $200,000, design layout and construction drawings of $40,000, just to mention a few. Typically, a firm’s office leasing cost is the second largest administrative cost behind salaries, taxes and benefits. Rental cost alone, however, is only the first consideration in leasing, albeit the largest component.

There are several other categories that carry a great deal of liability to an office user if not reviewed and resolved prior to any lease. Tenants need to spend solid time determining the existing requirements by first taking careful inventory of persons, furniture, offices, and files. Forecasting is needed to highlight any areas that will be expanding or contracting and areas within the company that should or should not be adjacent. Although many buildings may seem friendly enough, each one must be reviewed carefully to determine the compatibility with the tenant’s needs and concerns.

It is necessary to prepare a detailed list of the building’s assets, liabilities, physical condition, construction, heating and air-conditioning, fire protection, floor plan size, and many other elements for you to compare each detail accurately.

Operating expense increases that are billed to the tenant during their lease show up with a big surprise if the cost was forgotten or unbudgeted. Complete details of how the owner intends to operate the building will verify any “hidden” costs down the road.

Remember also that the cash allowance that is made available for constructing or remodeling an office must be determined to be fair, accurate and appropriate to the requirement. Another loss of dollars if not pinned down. It is not at all uncommon for the board of directors of companies to have input on this topic considering its considerable financial impact; as a total cost as well as the contingent liability it represents over many years.

As a result of the great many aspects of leasing coupled with the great amount of time necessary to manage them, and the large financial commitment, there is an absolute need for process and detail management. Your ability to successfully manage the leasing process will hinge upon the team you select to handle the details, and the posture you take in leading your team and negotiations with landlords.

The commercial real estate business has witnessed a metamorphosis toward serving the tenant. While ordinarily agents have brokered office leases acting as either an owner’s agent or a dual agent, it has become more common for each office tenant to be represented by their own agent. Most States now have new tenant rep or buyer’s agency laws affording the tenant the legal representation which in the past was provided only for the landlord. During the glory days of the tenant’s market when two years free rent was in vogue, the agent was more of a glorified delivery person, simply poring over which pic-nic basket to take. However, as the market may turn more to the favor of the Landlord, tenants find out fast that every foot of ground in the negotiations is difficult.

Likewise, tenants are fast coming to the conclusion that it is not just the rental amount that needs managing, but the whole process. From the first thought about your impending lease expiration to the delivery of the last desk in the new office, the whole multi-faceted process requires a unified management team. No longer can a tenant simply depend on an agent to “find” office space, have Fred figure out what kind of needs there are, have your brother-in-law look at the lease and have Matilda call the moving companies.

It is the whole process which needs managing and which requires a paradigm shift on behalf of the tenant to recognize the need for a new management program to deal with the new problems. It is a “Tenant-Controlling” paradigm. Advocacy for the tenant is the beginning point for what is required by all business; to manage the office leasing element no differently than any other great liability. In a manner of speaking, the office space should be looked at as a partner in your Goals and Plans, a tool to help. Look at this from a long range planning point of view. Allow your facility to be an asset or partner to that plan, not just office space. And although office space is real estate per se, real estate only plays a role in the total picture – don’t think otherwise.

It will be many years before you have to undertake such a project again, and in some cases you may never, either by default or design. The message here is mastery and control over all elements, rendering you never to be subordinate or reactive to the elements, as so often is the case in office leasing and in real estate. Your employees will be affected by this, even your spouse will notice possible stress as you undertake an office relocation or renewal. These tips will enable you to avoid all stress relative to this undertaking. If you do become stressed out, read this website again or the relative section. State to your team members the same thing and give them a copy of this website to keep handy.

Also, don’t negotiate all things at once. Plan which items you should stage along the line. Office leases are substantial financial instruments, even if you are a smaller tenant. Don’t spill all your jellybeans in the lobby. If you know that you will be seeking a large concession from the landlord or asking for his acceptance of a particularly thorny element, then negotiate to agreement on some items and hold back others until the landlord has sufficiently invested the amount of time, energy and money to think you are nearly at the alter. Do this with your present landlord as well if you intend to renew, but don’t let him think you intend to remain. If you need some time or more leverage to keep the landlord on the hook, nothing gets a landlord quite so pregnant like asking him for a large photograph, rendering of the building or an aerial photo to share with employees and customers. Or, ask the landlord for a draft lease document for initial review. Whether you are sincere or not about your real intent, this type of request produces endorphins and serotonin in all landlords.

Turn the negotiations around. Instead of submitting an RFP (Request for Proposal) from the landlord, to whom you would then be reactive in the negotiation, submit an Offer to Lease proposal of your own in the form of a Summary of Salient Terms. A letter of intent, while not binding, certainly creates the stage that you intend to do something. But you may not. You may be just negotiating for better terms with one landlord, or at another building altogether, or even to re-lease where you are.Use the media if you need to. It hurts no one if the paper “discovers” you are considering the county location, when it is the terms with the city location you are actually seeking to improve.

Above all, enjoy this process, because it is multi-faceted and brings a large pool of personalities and talented people into the scene. And, let’s be honest. No one ever died from leasing office space. But everyone that does is participating in the great industrial, capitalist machine: to be better, healthier, wealthier and wiser tomorrow than today.

OfficeTenant.com is the first website to offer comprehensive mentoring and coaching to office tenants along with access to buyer’s and tenant’s agency laws in the US to empower tenants.

By: Christopher Desloge

About the Author:

Christopher Desloge is a three-decade veteran tenant representative in office leasing, authoring The Tenant’s Guerilla Guide to Office Leasing. Mr. Desloge is Chairman of the Tenant Rep Agency, LLC specializing in office tenant representation throughout the US. The Tenant Rep Agency, LLC has teamed with HOK, the largest architectural firm in the world to provide office leasing tenant with tenant representation brokerage services coupled with space planning, tenant development, construction drawings and construction administration all at no cost to the tenant. Tenant Rep Agency website is http://www.tenantrepagency.com

Whether dealing with an existing lease or looking to enter a new lease, the key to negotiating a better lease is to find other office space for lease. What I mean is that you have to be willing to take the time and effort to shop the market for alternative spaces. You have to know what other options are available to you and what the rates, sizes, amenities, access and availability are.

Many tenants fall into the trap of believing that since they have signed a long term lease they are locked in. Let me tell you if you haven’t already heard, everything is negotiable, especially in this market we are experiencing now. Landlords are desperate for tenants and they’ll do anything to keep from loosing an existing one.

As consumers we are all well aware of “comparison shopping”. That is where we spend hours online or going form store to store trying to figure out which vendor offers the absolute best price on the exact product or item we are wanting to purchase. This is the process that puts so much pressure on vendors to keep their prices low and to offer the best value for your business. With out it, pricing would run a muck. Obviously this process works to our advantage as consumers, otherwise why would vendors be offering price match guarantees on purchases if you find a better price? This is exactly what you are going to have to do with your office space lease if you want to negotiate a better deal.

You’re going to have to use other office spaces as leverage to reason with the landlord that he needs to give you a better deal otherwise you are going to have to move or sign a new deal with another building leaving him empty handed. Now obviously if you like the space you’re hoping that the landlord will concede to your wishes, but in order to truly get the best deal you’re going to have to stick to your guns and be willing to move or accept your second choice if the landlord baulks at your request.

The other key to negotiating a better office space lease is getting a middle man to represent you. These people are typically local real estate professionals specializing in tenant representation. A tenant representative is going to help you in a number of ways but the best part of the whole deal is that these people will typically work for you absolutely free! That’s because typically in most cases it is the landlord who pays the commissions to the rep, yet the rep absolutely represents your best interest and not the landlord who is paying him.

So here are a couple things you can expect a tenant rep will do for you. First, he’s going to help you identify and locate suitable spaces. The difficulty with finding office space for lease is there is no such thing as an apples to apples comparison. Each and every office space is unique, unlike the digital camera that you spent hours and hours comparison shopping for. Therefore the inside knowledge of someone who spends all of their working time looking at office space for lease is going to save you a whole lot of time and effort trying to identify acceptable alternatives.

Second, never represent yourself in your own office space lease negotiations. Always use someone else to do your bidding. A tenant representative does this for you. Landlords constantly deal with tenants and lease negotiations and I can assure you they will have a professional representative representing them.

One benefit in using a middle man is that you are not directly in contact with the other parties. When negotiating directly you always run the risk of exposing insecurities, doubts and fears through emotions, voice inflection and body language that might weaken your position.

Another benefit in allowing a tenant representative do your negotiating is the ability to have a good relationship with the landlord after the negotiations are through. After all, once a lease is successfully negotiated you are going to have to interact and deal with your landlord for a long time to come. Your tenant representative can play hard ball with the landlord and it won’t matter whether the landlord develops ill feelings toward him. However, if you deal directly in your negotiations you run the chance of both sides developing negative feelings that remain for the rest of the relationship.

Another beautiful thing is the tenant rep can negotiate solid terms for you with out the authority to commit to anything in return. In other words, if the landlord says he’ll do something then you can hold the him to it, however if the tenant rep says he can do something there will always be an underlying disclaimer attached that says ‘assuming my client approves’. After all, he can’t actually promise anything to the landlord with out your approval because he doesn’t have the authority to do so. The tenant rep can only say “I will check with my client”.

A final reason to always use a tenant rep is because they do lease negotiations every day and know how to play the game. Yes, there is a game and the more familiar you are with it the better you’ll be. How often do you negotiate leases? Once every three, five or ten years? Even if you’re an incredibly good negotiator, your bound to be a little rusty due to lack of repetition.

The strategies and tactics are the same if you are looking to find a new office space for lease or renegotiate an existing lease and I hope these tips prove to be beneficial in helping you negotiate a better office space lease.

By: Taylor Snede

About the Author:
More information on how to find office space for lease. More information on finding local tenant representation for lease negotiations.