5 Mistakes People Make When Leasing Office Space

Note: This is a guest post by Justin Lee, a licensed commercial real estate broker with 7 years of experience in commercial property leasing and development. More of his bio is below. We invited Lee here to help business owners when searching for that perfect office. When you get a business loan, it’s important you don’t blow that money on the wrong office space …

5 Mistakes People Make When Leasing Office SpaceWhen visiting with small business owners about how their company’s office space plays a role in the business growth and culture, there’s typically a common theme that rears it’s ugly head: mistakes made in the leasing process.

Owners and decision makers often make several key mistakes that can end up costing them significantly down the line and can even cripple their growth rate. Because office rent is usually the second highest expense, doing things the wrong way can be devastating.

Here are the 5 big NO NO’S that every small business owner should avoid like the plague.

1. Impulse Decisions

Renting space for your business is a huge decision, not only financially but emotionally as well. We spend over one half of our waking lives at our work place, so it’s paramount to pick the most suitable space, building, and location.

This is not something that should be decided on over the course of an hour, or even a day. Prospective tenants must leave emotion at the door when they tour spaces and avoid being “wooed” by landlord agents’ attempts to close you on the spot.

2. Solely Relying on Listings

It’s quite common today for business owners looking for space to simply Google “office space in city X” and view several sites, which contain nothing more than available space listings. While listings are a decent teaser and a good way to gauge the market on a high level, the information provided with each listing is not only inadequate, it’s also frequently widely inaccurate.

Landlords want nothing more than for a business owner to view a listing, go directly to the property, and give the leasing agent the opportunity do everything they can to convince him/her that they need to sign a lease TODAY in their building to get locked into a fantastic deal.

3. Going It Alone

Lease term flexibility and lease complexity can vary depending on the size and type of space, but it’s typically never a good idea to attempt to sign a lease for anything greater than 1,500 square feet without using a good tenant broker. There are usually thousands of available space options, tons of lease clauses, and many other variables to consider. There’s no way someone without a commercial real estate background will be able to make the most informed decision possible for their business space needs.

Tenant brokers represent YOU (the tenant) and only you. They are market experts who not only do all the heavy lifting, but also are trained in negotiating the most favorable lease terms for their clients. The landlord, not you, pays their fees. With all of the other somewhat hidden costs that are present within a commercial real estate lease, having a tenant broker can typically save you up to 25% of the total value of the lease.

4. Procrastinating

You should begin searching for space no later than 6 months prior to estimated move in date, if possible. It’s important to get a good lay of the land, see different spaces, and gauge where the market is. Like anything else in life, preparation always pays off in the end, and in this case, it can end up saving you thousands of dollars.

5. Going At It Cold

Do some research. Get a good idea on the fundamentals of leasing commercial space before you start looking around. Prospective tenants need to understand who the players are, what the pitfalls can be, and how the process works before they start honing in on signing a lease. Small business owners make uninformed decisions about leasing space every day, and it can literally crush their company.

Renting office, retail, or warehouse space is a big decision for any small business owner or operator. Understanding all of your options and how the process works will make you an informed consumer. More often than not, having representation is a good idea too. Make sure you take the right first steps in the process so that you won’t get burned later on.

Your Turn

Have you been burned because of a bad office space? What advice do you have in leasing office space?

About the Author

5 Mistakes People Make When Leasing Office Space

Justin Lee

Justin Lee is a licensed commercial real estate broker with 7 years of experience in commercial property leasing and development. He along with 2 other co founders launched TheSquareFoot.com with the goal of making the space leasing process more digestible for small business owners and entrepreneurs. Follow them on twitter @TheSqFt .

It takes a little cash to change the world.

So what are you waiting for?

About the author


  1. Nice sales pitch – very little information to help the individual. So if we don’t hire an agent what are the options.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Get more small business tips from Lendio.

More like this