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Owning a business can be as difficult as it is rewarding. It’s not until you’re running your own show that you see everything that goes into a successful operation. You need to handle hiring, quality control, PR, and everything in between. That includes finding a space to put your business! If you look at commercial property trends in 2022, many businesses have shifted to a remote operating model rather than renting commercial space. However, a physical office is still essential for many others. If having an office is necessary for you, then you’ll need to know how to rent space for your business.
You can find commercial office space through online listings or by using listing brokers or tenant brokers. Finding a space on your own is always an option; however, a broker can help you negotiate, schedule walk-throughs, and generally manage the process.1 If you already have office space, it may be a good time to determine your commercial property value.
Determine your office space requirements
It’s important to understand the needs of your business before you go searching for an office space. Does your business require privacy? You may want to avoid shared office spaces. Do you want an open office space or closed-off cubicles? An open concept may save cost but more closed-off spaces can help employees focus. You should also consider the amount of space you need. Your team may be smaller right now, but if you plan on growing, you’ll eventually need more space. Make sure you consider the current status and direction of your business before making any decisions. Knowing the answers to questions like these is an essential first step to securing the right office space.2
How much does it cost to rent office space?
As you might expect, the cost of renting office space varies greatly depending on the kind of space you’re renting. Consider the office space requirements you’ve outlined for yourself. It may cost more to rent a larger space with more built-in features or a space in an area with high demand for real estate. Office space can be one of the largest pieces of a company’s operating costs, so determining your budget is crucial before moving forward. Consider that your costs may also include building taxes, maintenance, and insurance. Working with a broker can help you determine if an office space with your requirements fits in your budget.3
How to find commercial real estate
Finding commercial real estate isn’t as simple as finding residential properties. Unlike the residential market, no singular platform has created a database for finding commercial properties yet. Instead, businesses searching for commercial real estate typically choose between searching for online listings, working with a broker, or both. A broker can simplify the process if you find yourself with little time to spend on office hunting. Hitting the streets is also an option if you already know of some possible leads. Sometimes business relationships or a simple drive around the part of town you’re interested in can turn up viable options.3
How do commercial leases work?
You’ve found the perfect place and your whole business is ready to toast to the new office! Now you just need to sign the lease. A commercial lease contains many of the same things you find in a residential lease including the lease term, rent amount, and security deposit. It may also include information on the permitted use of the space, language specifying that only your company can use the space, guidelines on maintenance and renovations, insurance requirements, and standard clauses for things such as termination. There are multiple kinds of commercial leases, so make sure you know what type you’re signing:
- Full-service lease – The tenant pays base rent and the landlord pays utilities, insurance, and taxes.
- Net lease – The tenant typically pays a lower base rent, but also has to pay a portion of the building’s operating costs.
- Absolute NNN lease – The tenant pays all the building’s costs, including repairs. (NNN stands for net net net, referring to taxes, insurance and common area maintenance fees.)
- Percentage lease – Tenant pays a percentage of retail sales on top of the base rent.
Make sure you completely understand the terms of your lease before signing it, as your company’s future success can depend on your ability to fulfill the terms. It’s always a good idea to bring in a professional like a broker or lawyer before signing anything.4,5
Insuring your commercial rental property
Unless you’re on a full-service lease, you’re probably going to need your own commercial insurance. Commercial property insurance protects your company’s physical assets from fire, explosions, burst pipes, storms, theft, and vandalism.
Most leases will require you to have some form of insurance, but if for whatever reason your lease does not require it, you should still have insurance for your business and review your coverage regularly. Having sufficient protection for your company’s assets can be the difference between enduring a disaster and going out of business.
 https://fitsmallbusiness.com/lease-office-space/, Accessed March 2022.
 https://www.squarefoot.com/leasopedia/10-step-guide-available-office-space/, Accessed March 2022.
 https://www.tylercauble.com/blog/find-commercial-space-for-rent, Accessed March 2022.
 https://www.businessnewsdaily.com/7619-negotiate-commercial-lease.html, Accessed March 2022.
 https://www.austintenantadvisors.com/blog/nnn-mean-renting-commercial-real-estate/, Accessed March 2022.
The information included is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts. It is the reader’s responsibility to comply with any applicable local, state, or federal regulations. Nationwide Mutual Insurance Company, its affiliates and their employees make no warranties about the information nor guarantee of results, and they assume no liability in connection with the information provided.