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Five Ways to Save Money on Office Space, Cost Controls Article - Inc. Article by Lost at 12:10 am EDT, May 8, 2007 |
# Get representation. You want a broker and a lawyer working on your side of the table. In his book Tenant's Handbook of Office Leasing, Stanley Mark Wolfson writes that "using a building's broker to negotiate a lease for you is foolish and stupid." # Measure the space. Don't automatically believe the square-footage amounts -- or worse, approximations -- the landlord tells you. # Put a cap on rent increases. Try to get a fixed percentage rate of annual increase. Or tie rent increases to some real-world index, such as the consumer price index, though doing that could be risky. "It depends on what you think the market will do," says Greg Gunn of Cottonwood Realty Services LLC, in Salt Lake City. # Get a cancellation clause. The landlord wants a five-year lease, but you worry you'll outgrow the space. Gunn suggests negotiating for the right to cancel the lease after three years if you pay for unamortized costs. # Make sure you have the option to renew. Try to lock in the renewal rate, too, says Andrew Johnson, managing director of Johnson Commercial Brokerage in Los Angeles. "If you find the market is lower, you can always renegotiate," he says. # Minimize restrictions on your ability to sublease. If you grow, you want to be able to move and sublease the space. "The 'use' clause should be as vague as possible," says Johnson.
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