An office space lease can either be brief or lengthy, varying from month to month to annual lease agreements.
Types of Office Space Lease Agreementsįor a growing company looking for professional office space, leasing a commercial property is the best option. If the tenant’s business model thrives from visits, they must then enter into a separate parking space lease contract to reserve slots.ĭespite the cons attached to an office space lease, there are many benefits from renting a commercial property including additional income, fixed rent, and the extra space for shared activities. For example, office space is only provided a limited number of parking slots, causing inconveniences on the part of visiting clients. This makes the office space lease more appealing to business owners who want the extra space without shouldering the entire cost.ĬONS: Because certain areas in the property are shared, however, the administrative staff, as well as the security personnel, can be very strict when it comes to rules. PROS: Though the tenant is obligated to pay additional property dues in an office space lease, their employees can use the common office space, which stretches from the lobby and the waiting area to the rooftop and cafeterias. Once the current office space lease expires, landlords may strictly implement the termination date and deny the option to renew if this was not previously agreed upon. Still, an office space lease is usually bound by a long-term agreement of five to ten years and allows the tenant to lock in the rate with a minimal yearly percentage increase.ĬONS: Although the landlord may have a strong incentive to think long-term and write a conservative office space lease contract, they can get real estate agents to assess if the value of their commercial property. PROS: The first thing you would probably realize is that the landlord will almost always get the upper hand when negotiating an office space lease contract. Other computations that your landlord may have added to the rent can include prorated real estate taxes, due date penalties, and upkeep costs for the entire property, not to mention a security deposit that the property owner will hold for the entirety of the contract. The office space may then be used as a marketing hub where the tenant can convince clients and close deals.ĬONS: However, if they aren’t wary of hidden expenses that come in addition to the base rent of office space lease agreements, renting one may be excessively costly. Especially in a commercial property, additional costs may be charged because of parking spaces, common areas, insurance, and maintenance of a shared space. PROS: For a small-to-medium enterprise, renting an office space is considered a business investment because the leased premises raise the company’s credibility, especially when leasehold improvements are completed. Based on the nature of a typical lease agreement, either party may encounter challenges including but not limited to the following: