Why take out a conventional lease
Signing up for a conventional lease on an office space facility is always an option well worth considering for businesses of a certain size. Some companies or organisations decide to buy the property that they intend to inhabit in order to give themselves both a personalised base of operations and a tangible asset that they own outright and could sell at any point if they needed to.
Renting offices from landlords though is generally a more common and popular means of establishing a company at a particular set of offices and it can be an ideal way to line up precisely the kind of offices that your business needs for the near term and for the future.
Choosing your location
The foremost consideration when it comes to deciding which property to commit to renting on the basis of a conventional lease will always be location.
If you know which city or which area you want to base your business from then it is important then to consider more precisely where you want to be positioned within that context. From that basis you can then narrow down your search for offices and look in greater detail at what individual properties might have to offer and whether they could be right for you.
Other considerations that might help you determine which set of offices would work best for your business will include the quality and abundance of local transport links. This is always likely to be an important issue for your staff and if there isn’t much in the way of transport connections then having parking spaces readily available can be crucial.
Rental arrangements and leases
Deals to secure your right to occupy a set of offices will generally work on the basis of having tenants pay their rent to landlords quarterly in advance. There are often points in time earmarked as moments at which tenants will have an option of ending their tenancy and vacating the premises. On the other hand there may also be points at which rent reviews can be conducted and the monthly or quarterly cost of your office rents could be increased at those junctures.
Leases vary in length but tend to be somewhere between four and seven years in length – although they can last for as long as 25 years. Leases are of course binding legal documents and the obligations that they require of office space occupants should not be taken lightly. It is possible for prospective occupants to negotiate rent-free periods when they commit to a new leasing arrangement and break clauses that allow for an early exit of the deal that’s been agreed.
It is important to get all the legal advice and guidance you might need from relevant commercial property experts before you decide to agree to lease a particular set of offices as a business occupier. There are few overheads more burdensome for businesses than office rents so it is vital to make sure that any deal you agree is right for your organisation in the near term but also into the future as well.
Key benefits of conventional leases
- Security and peace of mind of long-term tenancy
- Offices can be fitted out to precise instructions
- Leases allow businesses to set down roots in prestigious locations
- Certainty of long-term leases can be strategically advantageous
Conventional leasing can be a good strategic move for medium-sized or large-scale companies or organisations which have certainty about what their office space needs will be over the next few years and a clear idea of where that space should be located.