Lease Process Guide

An office space lease sets out the parameters of a business relationship, much like a partnership agreement. Just about any standard lease serves both parties, but the test of a good lease hinges on hiccups that could occur during the terms of the arrangement. Tenants often loose sight of the fact that the standard form lease represents the landlord’s wish list and, if not appropriately modified, may not serve their interests when issues arise. On the other hand, an overzealous tenant can often request changes to the lease that, if not fully understood, can cause unforeseen difficulties.

Adversity between the tenant and landlord can result from many things, though initial lease negotiations are typically directed toward base rent and concessions. The potential for other concerns remains, however. It is imperative that the more significant issues are highlighted in the negotiation phase and practical ideas and suggestions are offered to assist tenants in:

• Understanding the office space lease process, from beginning to end;
• Understanding key office space and commercial real estate terms;
• Analyzing tenants’ office needs and determining their square footage requirement;
• Assessing the tenant’s lease office space vs. purchase office space decision (cost of occupancy analysis);
• Providing a method of office space property comparison analysis based on a market survey;
• Developing the critical Request For Proposal (RFP) for office space.

The process of signing a lease requires an evaluation of the tenant’s own needs for office space, but looking entirely at the process from the tenant’s perspective is ineffectual. Successful negotiation for office space requires knowledge and empathy regarding the significant issues faced by the landlord.

The following articles will introduce clients to a number of steps that will lead to a balanced arrangement on issues typically affecting negotiations of office space.