As companies continue to adjust operations in response to the changing work landscape, renting an office in 2023 is no small feat. Not only do you need to find a space that’s big enough for your current needs, but you also need to make sure that it will be able to accommodate future growth.
With hybrid work now commonplace and technological advancements altering what tenants should look for when renting office space, finding suitable space can be overwhelming. In this article, we’ll discuss some things tenants should consider when renting an office in 2023 and provide best practices for finding office space that fits their needs.
What To Consider When Renting an Office in 2023
With technology rapidly advancing, the way we conduct business has changed significantly in recent years. Several important factors to consider to ensure you choose an office space solution that best meets your needs and budget.
Hybrid Work Options
Hybrid work arrangements are becoming increasingly popular as companies look to optimize their office space and embrace the possibilities of hybrid offices, according to CBRE. Hybrid office space allows tenants to use a mix of remote, shared, and dedicated office spaces, allowing them to take advantage of the flexibility that hybrid working can bring.
Location and Cost of Rental Space
When looking for office space to rent, tenants should consider the location of their prospective rental space. Suburban and urban suites can vary significantly in terms of cost, with suburban offices typically less expensive than their urban counterparts. Other factors that affect the cost of renting office space include:
- The size and layout of the office.
- Proximity to transportation hubs or other business districts.
- Level of amenities available in the building or complex.
- Access to parking and outdoor areas.
- Building’s age, condition, and class.
- Lease terms such as length and type.
Leasing Terms and Requirements
When entering a commercial office lease, there are essential terms and conditions to consider. Tenants should be aware of any restrictions or limitations that may apply, such as maximum occupancy limits, parking space availability, repair and maintenance provisions, insurance requirements, rent increases, termination clauses, and more.
There are three main types of office leases tenants should be aware of:
- A full-service or gross lease where the tenant pays the same fixed amount each month.
- Modified gross lease includes a fixed base monthly rent plus items such as utilities or janitorial service paid directly by the tenant.
- Triple net (NNN) lease consists of a fixed base monthly rent plus the tenant’s share of the three Ns: property taxes, building insurance, and common area maintenance.
Office Amenities & Services
When tenants are considering office space for their business, top-notch amenities are increasingly important, according to a CRE outlook report from JPMorgan Chase & Company. Here is a look at top office amenities in 2023:
- Private outdoor spaces such as patios and decks.
- Onsite services like childcare and catering.
- Natural light.
- Breakout areas.
- Flexible seating arrangements.
- High-tech meeting rooms.
- Well-equipped fitness rooms.
Tenant Improvements and Customization Opportunities
Tenant improvements (TIs) are a fundamental part of office leasing and often allow office tenants to customize their space in ways that best suit them. TIs can range from minor cosmetic changes such as painting or installing new carpeting to more complex issues like electrical and HVAC system upgrades. Depending on the terms of the lease agreement, either the landlord or tenant may be responsible for paying for office TIs.
Best Practices for Finding Office Space in 2023
With the recent shift towards remote work, finding the right office space to accommodate a business’s changing needs is more important than ever. To help with this task, some best practices should be followed when finding office space in 2023.
Determine Your Space & Budget Requirements
When budgeting for office space, it is crucial to consider factors such as the size and layout of the space that best suits your needs, the type of area you want to lease in (be it a more expensive CBD or secondary office market with lower rates), and whether an office closer to where onsite employees live would be a better choice. Understanding all these elements allow tenants to determine their budget and space requirements to build the office that best meets their needs.
Research Property Availability Online
Searching for office space to rent can be manageable with proper preparation and tools. With online commercial real estate listing websites like Crexi, tenants can easily find available properties in their area with detailed information about availability, specifications, and pricing. This information allows them to quickly evaluate different options and make an informed decision without contacting individual landlords or brokers. By researching properties online, tenants can save time and energy while ensuring they find the perfect office space that meets their needs.
Contact Local Real Estate Brokers or Agents
Homeowners are savvy enough to realize when it’s time to seek help from a real estate agent. However, many business owners mistakenly choose not to hire an expert for their office space search. Make no mistake – as the commercial leasing industry continues to become more complex, it becomes more important to partner with a local property specialist who can help you find your ideal office space rental.
Hiring a tenant representation broker offers:
- Market insights, including current trends and rental rates.
- Negotiation assistance for financially advantageous lease terms.
- Knowledge of local building codes and zoning regulations.
- Access to exclusive listings for desired office space.
- Expert advice throughout the leasing process.
Consider Subleasing Opportunities
Subleasing can be a great way for tenants to save money and time on finding their ideal workspace. It involves taking over the remainder of an existing lease agreement from another tenant rather than directly from the landlord or property owner. This option can benefit all parties involved as it reduces vacancy rates and may provide lower-cost office space with amenities such as furniture, utilities, and other features not available through traditional leases. Subleases can also offer peace of mind by allowing the original tenant to minimize losses by renting out any remaining office space in their lease agreement.
The Bottom Line
When renting an office space in 2023, there are key steps to follow:
- Clearly define the size and type of space you need, any special needs it must meet, and your budget.
- Search online and offline for prospective spaces that match your criteria.
- Visit each option to ensure that it meets your requirements before signing a lease agreement.
By following these best practices, tenants can find an office space ideal for their current needs and will accommodate future growth.