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Questions to ask before leasing office space

If this is your first commercial lease, the quoted rate is the least important number in the conversation. Here is what to ask instead, in the order it usually matters.

Askthe NNN estimate, in writing

Askthe TI allowance

Askwhat happens if you grow

Askwho fixes what

The questions that change the deal

Start with the full monthly cost. A rate of $17 per SF NNN is base rent only. Ask for the current operating expense estimate per square foot and ask how it has moved over the past few years. Now you have a real budget instead of a headline.

Then ask about the tenant improvement allowance, because that determines whether you pay for the buildout or the landlord does. Ask what happens if you outgrow the space, since some buildings can expand you next door and some cannot. Ask who is responsible for the HVAC unit on the roof. And ask what the term needs to be, because a longer commitment often buys a better rate and more TI money.

Bell Road Office Park, a renovated single-story office building in north Phoenix

Quick questions

What is a TI allowance?

Tenant improvement money, a sum the landlord contributes toward building the space out for your use. It is negotiable and it is often worth more than a small discount on the rate.

How long is a typical office lease?

It varies. Ask what term the landlord is looking for and what changes if you go longer or shorter. Term is one of the most negotiable pieces of a lease.

Do I need my own broker?

Ask who represents whom before you get attached to a building. It is a fair question and any professional will answer it straight.