Choosing the Right Office Space Leasing Company for Your Business Needs

Shreeja CS
33 minutes ago
6 min read

Why Office Space Leasing Matters for Your Business Growth

An office space is a place of business that proves the existence of a company. Naturally, the location, building, structure, design, etc. and the people working in them shows proof of business function.

It's one of the major reasons why companies lease office space in a prime commercial area.

There are tons of advantages of leasing an office space in a commercial region.

Networking Opportunities: A commercial area houses a variety of businesses from different industries. Organisers tend to host career or trade fairs, conferences and round table discussions in such regions. A business owner can attend such events, giving more opportunities to talk about their company.

Professional Image: Commercial areas are surrounded by large and well designed structures with amenities within walking distance. It creates a positive first impression on businessmen or clients visiting their company.

Flexibility: If a company prefers staying rooted to the same locality during expansion, they can choose for flexible office space leasing options within the vicinity. New-age businesses prefer short-term office leases in such regions to prevent heavy spending.

Location plays a key part in gaining recognition for a business. Bengaluru is a well known prime destination for tech companies. It continues to show an increase in office space leasing activity nudged forward by office space leasing companies.

What Do Office Space Leasing Companies Offer?

Office space providers core functions include knowing about the market, location, current rates, availability, etc.

Based on this information, their corporate office leasing strategies revolve around the best possible solutions for a business.

1.Types of office spaces available

Coworking/ Managed: Coworking space providers offer office facilities that can cater to several businesses at once. These spaces are preferred by startups or small teams getting their business off the ground.

Managed Office space providers oversee an independent building, for a single company, in prime locations with amenities and facilities to keep a business running. The office is fully serviced and offers professional support.

These spaces use subscription based or pay-as-you-go models leaving room for flexibility.

Shared: It's a work environment used by solo professionals, companies or a small group of people. The equipment and facilities in this office space is shared between the occupiers.

A shared office space can also be called a coworking space.

Conventional: A conventional office space can be completely bare or furnished. A completely bare space can be renovated based on the needs of a business. A furnished setup can be scaled up or down according to the employee strength.

Office space lease agreements for conventional offices are long-term, sometimes spanning several years.

2.Benefits of leasing vs. purchasing

During the early stages of a business, using a major chunk of the company budget for purchasing an office space could become insufficient for funding and growth. Leasing an office space is a more economical choice.

It offers a temporary solution and allows businesses to plan freely for their future. A lease agreement can be negotiated and renewed.

Some office space providers offer scalability, so when a company requires additional space the same lease can be extended with some changes to the lease amount.

Once a business becomes established, they can purchase a building that could become a landmark location identifying their brand.

How to Evaluate Office Space Leasing Companies

Many office space providers line up before companies and offer affordable office space leasing options.

Partnering with office space leasing companies that can provide the best options quickly with more diverse options can help companies secure the space they need efficiently.

1. Factors to consider: location, size, and flexibility

Startups and established companies are opting for flexible office space leasing. Coworking and managed office players such as Smartworks, Indiqube, etc. are strategically located and offer hybrid office leasing solutions.

Their office space sizes range from standard desk setup to premium options including 3D modelling for planning personalised office layouts.

Capable leasing companies have a tie-up with such operators and can arrange for these services at reasonable costs.

2. Key services and additional offerings

Office leasing companies are hired by corporations to ease their load when it comes to leasing, property research and real estate market intelligence.

They handle the core leasing services that saves costs and provides the best space for workers.

Their services include,

evaluating location,
negotiating lease rates and accompanying fees,
reviewing lease documents,
Understanding fit-outs suited for a company, etc.

Lease Terms You Should Understand Before Signing

Companies should choose office space leasing companies well versed with common lease terms and pricing models. Some of the common terms and pricing models have been summarised here for better understanding.

1. Understanding lease duration and pricing models

Lease duration varies for traditional and flexible office space leasing. A traditional lease is calculated on a per square footage basis, while a flexible or managed office lease is billed per seat.

In Traditional leases, fixed pricing model is common with escalation rates and lock-in periods. Mid-sized and large companies often go for such leases as they prefer a more permanent workplace setting.

Flexible leases offer per-seat basis pricing, pay-to-use pricing, and subscription pricing. Companies can pay to occupy more seats when necessary and are charged only for the office equipment such as Wi-fi, printer, etc. they choose to use. Some companies also take team memberships and are provided a card. Any member of the team can use the facilities in a flexible workspace using the card.

2. Common lease structures: full-service vs. triple net leases

Both, full-service lease and triple net lease are structured to help the landlord manage the property expenses apart from the rent paid by the tenant, i.e., companies or corporates.

A Full-service lease payment structure is inclusive of office space rent and all other operating expenses associated with the property such as maintenance, repairs, utilities, amenities etc. An all-inclusive lease structure such as this is preferred for its simplicity in terms of budgeting.

A triple net lease includes the basic rent for the office space and three other specific expenses agreed between the lessor and lessee, or landlord and tenant. It can be property taxes, maintenance charges, etc. It's preferred by small-sized teams and companies as it typically has a lower base rent.

How to Determine the Right Lease Type for Your Business

Enterprise heads need to evaluate the finances and goals associated with their business. The lease type that aids in fast-tracking these goals and limiting excess costs will be the right move for the business.

Traditional lease vs. flexible leasing options

Traditional office space lease agreements are air-tight, involving large capital investments in terms of fixed deposits which need to be paid during the beginning of a lease. Any changes to office space design and structure can prove to be costly and time-consuming.

Once committed it's hard to back out of a traditional lease agreement without incurring penalties.

Flexible leasing’s main attraction lies in the varied options of short-term occupancy. The lease terms are customisable and all office equipment easily accessible.

There is less pressure for committing to a lease term, operators are willing to make adjustments when companies want to scale up or down.

Pros and cons of short-term vs. long-term leases

Pros & Cons	Short-term Leases	Long-term Leases
Flexibility	Relocating office during a short-term lease is convenient. Occupiers need to simply pack their bags and clear out their desk. Coworking space leasing provides subscription based payment systems. The Subscription can be cancelled or paused depending on business requirement.	Relocating office during long-term lease is mostly inadmissible. Occupiers need to wait out their term before shifting their office. Conventional offices require payment of huge deposits to secure the space. Occupiers cannot move in until the agreed upon date. Rent payment and escalation is fixed.
Move-in	Short-term leases require minimal effort during move-in. Flexible office space leasing operators provide furniture and equipment that can be found in a regular office.	Long-term leases have slower setup due to renovations. Occupiers need to buy or rent furniture and equipment independently. The installation and maintenance chargers are also borne by occupiers.
Maintenance	Maintenance contracts are under the prerogative of the flexible space operators for short-term leases. The charges for these are billed to the occupiers, which is inclusive of their subscription charges.	Maintenance of office premises needs to be managed by occupiers for long term leases. Lessees need to engage independent agencies for regular premises upkeep. The charges for the same are solely borne by the occupier or split between lessor and lessee.

Conclusion: Making an Informed Decision for Your Business

Where and how you lease an office space is a huge deciding factor when it comes to business expansion. That’s where office space leasing companies fit in.

The topics covered here are some of the common queries discussed between professionals while brainstorming smart office leasing solutions.

These basics will give a head-start and help discover cost-effective office space leases.

Citadel Propcon strives to secure affordable office space leasing options for businesses by connecting them with office leasing companies that understand their unique needs.