Negotiating the Best Office Lease for Your Business

Office space is one of the largest expenses a growing company incurs. Negotiating the best lease possible can save your company enough to hire a few more employees or to launch a marketing campaign. No lease is standard, however, so here are some suggestions to help you become a little more lease-savvy in order to negotiate a favorable office lease.

Permitted use of the premises. An office lease typically has a section that sets forth the permitted uses of the leased space. It is to your advantage to make this clause as broad as possible, because your business may diversify or you may want to sublease space to another business.

Term of the lease. Landlords are typically willing to make concessions for longer-term leases. A company's needs may change, however, so try to negotiate a shorter-term lease with renewal options.

Rent escalations. Fixed rent over longer-term leases is relatively rare. Sometimes, landlords insist on annual increases based on the percentage increases in the Consumer Price Index (CPI). If your landlord insists on rent escalations, try to arrange that a CPI rent increase does not kick in for at least two years. Then, try to get a cap on the amount of each year's increase. If you have to live with a rent escalation clause, consider a predetermined fixed amount.