Offices and office space has always fascinated me. I love bringing people together and customizing a sweet office. Just think about it: what percent of your waking hours do you spend at work? If you’re like me, and it’s a high percentage, you want to have a great space that you genuinely look forward to going to several times a week. Now, the coolest office space in the world won’t make up for a weak corporate culture, but if you have a great corporate culture, an amazing office is just icing on the cake.
Only, commercial real estate makes it mind-numbingly complicated to simply compare the costs of different offices. Here are some of the common items thrown around:
- A number of months that are “free rent” or half rent
- Tenant improvement allowance per foot rented (e.g. the amount of construction costs paid for by the landlord to customize the space)
- Moving/cabling allowance per foot rented (e.g. money to pay for wiring and moving costs)
- Percent rent escalation per year and how soon does the escalation start
- Lease term and how that affects all the allowances above (e.g. a shorter lease results in smaller allowance but more flexibility for startups)
Imagine a spreadsheet with many different variables and that’s what’s needed to compare different office space options. There has to be a better way for startups to rent office space.
What else? What are your thoughts on these challenges when comparing commercial real estate options and what are some additional challenges?