Mistakes to Avoid When Considering a New Office Lease in Vancouver
Palagon Office Space
An office lease is a crucial operational component for small, medium, and established businesses not looking for the financial obligation of purchasing commercial real estate. Your choice of office space, however, can have considerable long-term consequences for your business. Because of this, where and how much office space to lease are two of the most important decisions facing business owners in Vancouver.
The decision-makers responsible for securing suitable office space typically aren’t real estate professionals, and even with the help of a broker, finding the right office lease in Vancouver can be a trying task. Due to the amount of time and resources required to scout and review potential office spaces, tenants often feel pressure to enter into rental agreements without fully considering how this choice will impact their budget, employees, and clients.
Avoid living with regret by not making these common office lease mistakes.
Not Doing Enough Research Beforehand
As a businessperson, you understand the value of knowing your product, and the same principles can be applied to commercial office leases in Vancouver. Before the active search phase begins, you should already have a good understanding of what it is your business needs from an office lease.
Vancouver offers several distinct types of office leases, including serviced offices, co-working spaces, and conventional office rentals. While you may not yet know which style best aligns with your needs and long-term goals, you can narrow down the search by preparing a list of areas, services, and office amenities that are important to your business and employees. This shortlist may include things like proximity to public transit, parking, and a neighbourhood with many cafes and restaurants.
Leasing More Office Space Than You Need
New businesses frequently miscalculate the amount of office space they need, thereby, often leasing far more square footage than is necessary. Too much office space can quickly become a financial burden for growing companies requiring difficult decisions to be made on whether to ride out the lease or break the agreement and begin searching for a new space.
Similarly, leasing an office that is too small could mean your company quickly outgrows the space, and if no additional offices are available, you could be looking at moving once again.
To choose the right size office lease in Vancouver, consider significant factors that could affect your office needs in the short and medium term, including:
-Projected annual growth
-Number of new employees you anticipate hiring
-Significant upcoming operational changes
Entering into a Lease Agreement That is Too Long (or Too Short)
Unless you are an established company with relatively stable growth, signing a multi-year commercial lease could prove problematic. As discussed above, long-term lease agreements can tie you to office space for several years. If your needs change during that time, whether needing more room, less space, or an office in an entirely new location, you’ll be subject to whatever early termination penalties are outlined in your rental agreement.
On the other hand, frequently signing short-term lease agreements can open your business up to significant increases in your monthly rent based on evolving market conditions. The best way to circumvent these challenges is to sign a lease term that makes the most sense for your business’s growth stage and to be smart in negations with prospective landlords. Including an early lease termination clause or a rental price increase cap in a lease agreement is often possible.