If you are looking for commercial office space to rent and have never done this before, understanding how commercial leases work is important before you sign on the dotted line. You may even want to hire a real estate attorney to assist you through this process. Here are two important things you should understand as you begin to look for the right commercial office space to rent.
The Monthly Rental Payment
Renting commercial real estate is very different from renting residential real estate, and one key difference is the way the rental amount is determined. When you rent office space, the landlord of the property will quote you an amount in terms of square footage (SF). This amount could be $10 SFor much higher. Entrepreneur reports that the average price for office space in 2013 was $23.23 SF.
The amount you are quoted in terms of SF refer to the cost annually for one square foot of space you rent. For example, if a property is $10 SF and you are renting 2,000 square feet, you can compute the monthly rental amount with these steps:
- Multiply the amount per SF times the amount of space you will rent: $10 x 2,000 = $20,000. This amount represents the annual rent for the space.
- Divide the annual rent by 12 months: $20,000/12= $1,666.67. This is the amount you will have to pay per month for the space.
Once you calculate this, you will know what your monthly payments will be, but you should also find out what space you will actually get and pay for if you rent this commercial real estate.
The Difference Between Rentable And Usable Space
One key factor to understand with commercial leases is the difference between rentable space and usable space. Usable space is the actual space your business will occupy. It may be one large room, or an entire floor of a building. Usable space is space that is only available for your business to use.
You may discover that your rental amount is based on a larger amount of space than just your usable space. This is because it may include additional space inside the building. This is very common when multiple tenants share a building. When sharing a building, there is common space that can be used by all tenants.
This common space is divided up, and you will actually have to pay rent on some of the space. This is why you may be paying rent on more than just the usable space you are renting.
Understanding these two things can help you know what you are getting into when renting commercial office space. For more information, you may want to contact a real estate attorney from the Brandt Law Group or a similar firm.
