If you decide that you want to lease office space and you've found a location, the next step is to negotiate a lease agreement for that location. A lease agreement is a contract between you and the owner of the property. Since it's a legal document, you should have your attorney review it before you sign it.
Lease agreements will vary, so there's no way that you can anticipate every issue that might arise. That's why it's important to thoroughly review the terms of the specific document you're being asked to sign. But all commercial leases should contain certain basic provisions with which you should be familiar.
A lease agreement is generally a long-term commitment for your business. View it as a planning opportunity and keep in mind the following points:
- Getting out of a lease can be a costly endeavor. Be certain that the location and terms of the lease agreement are right for your business.
- Being able to obtain additional connected space may be critical for your business in the future. If so, provide for future expansion in your lease agreement.
- If the real estate market is soft due to an overabundance of commercial lease space or a poor economy, your bargaining power will be greater. In a soft real estate market, you may be able to secure favorable concessions.
In some situations, you may be better off buying office space rather than renting it. For more information on that decision, see should you rent or buy?