A funny meme seen on the internet these days is the misspelled “No Regerts” tattooed on some poor sap’s forearm. From a Tenants perspective, the “Regerts” generally equate to dollars lost when leasing office space. Here are a few items to consider before signing that signature page:
Lack of Planning
Surprisingly many prospects I encounter do not know exactly what they need. Have an architect or space planner figure this out beforehand. Many building owners will provide this service at no charge based on signing a non-binding Letter of Intent.
Read the Lease
Landlords work long and hard to think of ways to legally make money from their properties. That long lease you are signing is not fair and wasn’t designed to be so. It was constructed to make ownership money. Some of the larger costing areas of concern outside of the Base Rent to be considered are who maintains the HVAC systems, how are common costs shared, and is there an additional rent features in the Lease.
Know the Lease Terms
Do you know when the rent payment is late and subject to penalty fees? The lease probably has a relocation clause, are you OK with the required notice and who pays the moving costs? When the lease expires, is there a holdover rate? Are ALL operational costs subject to pass-through above a base year or, are there exclusions or caps for items secondary to building operations?
Too Little Time
It is not uncommon to greatly underestimate how long it takes from first contact to occupancy. Even for a space under 1,000 square feet it could take up to 3-4 months. On the larger spaces say over 7,000 feet it could be up to 12 months before it is habitable.
Surprises are good for soldiers’ homecomings, gender reveal parties and even birthdays but not so much from you office lease. So, to avoid costly and embarrassing “Regerts” please read your lease. If you don’t understand what you are reading, seek legal counsel.