4 Key Tips For a Great Office Space and Lease

I love HGTV, and I love browsing on Zillow. 

So when it came time to find a location for my office, finding a rental location was very fun. 

I had a real estate agent, but I also found that I had spent a good bit of time on LoopNet to find my ideal location and office. For those of you who are unfamiliar, LoopNet is basically Zillow for commercial spaces. 

How to Use LoopNet Filters to Find Your Perfect Office Space

Today, I am going to break down the basics on how to find a good office space. 

In the previous post, we looked at how to find an effective location analysis to find what neighborhood or area to start your private practice. Now, let’s focus on finding an office within that area. 

The first thing you want to do on LoopNet is to set up your filters. I recommend searching for retail, medical, and offices as potential locations to lease.

The next filter you should address is the size.

Ophthalmology medical spaces need around 1200 to 2500 sqft, depending on how many exam lanes you need. As a single surgeon office with 1 slit lamp exam, I think 1500 sqft is perfect. 1500 sqft is enough for 1 exam lane, 2 diagnostic room, 1 waiting room, 1 reception area, 1 office space for you, and 1 break room. 

The last thing I would do is to look at the rental rate. This all varies by region. In Atlanta, $15-25 sqft/year is good price. In California or New York, the cost per sqft per year will be significantly higher. 

After filtering by type of location and size, you will have significantly narrowed down your options. 

Look at all the listings in detail. Here are some major considerations: 

Tip 1: Ask – What floor is it on? 

I strongly recommend being on the first floor if possible. 

If you are not on the first floor, the building must have an elevator. Otherwise, you will significantly turn away less mobile patients. 

As a doctor’s office, I expect to see a lot of older individuals who will struggle to go up and down stairs. 

Again, my office is on the main floor, and I cannot stress this point enough. 

Tip 2: Ask – What is the term (the length of the lease)? 

If you are like me and think you might want to move in a few years, you want a shorter lease term. I do find that most lease terms hover around 5 years. 

In general, a shorter lease tends to be more expensive month to month, and you have less wiggle room with negotiating. 

For me, I was still trying to get a feel of the neighborhood. I live in the Roswell area, and my office is in the Suwanee area, which is a good 30 minutes from my house and 45 minutes from my old office. I did not want to commit to an area that I would not potentially like.

Tip 3 – Ask – What type of lease is it? What is a Triple Net Lease?

One other thing to consider is to see if it is a triple-net lease. A triple net lease is a type of lease where the costs of structural maintenance and repairs must be paid by the tenant. This is in addition to rent, property taxes, and insurance premiums. Because these additional expenses are passed on to the tenant, the landlord generally charges a lower base rent. 

That means, if you see 2 identical offices and one is 15 dollars per sqft per year but it is a triple net lease, it may cost MORE than an all-included 20 dollars per sqft per year lease. 

I would definitely have a real estate agent familiar with commercial properties and even have a lawyer review the lease terms. 

The last thing you want to do is to start off your practice on the wrong foot. 

Tip 4 – Everything is negotiable on the Lease

Will the landlord always agree, well no. But you should always try to see if there are wiggle rooms. Here are some areas I would look to start negotiating. 

1. Have the Landlord Cover some Tenant Improvements

The first thing to look at is the TIs or tenant improvements. Tenant improvements is the budget allocated to allow for small remodeling. 

As a rule of thumb, the longer the lease, the more you can get negotiated in. I had a place that I was negotiating for a 6 years lease, and I was offered 60K in renovations. I knew I had a lot of leverage as that office location had been sitting on the market for months. 

2. Try to get Free Rent

Also, you could attempt to negotiate free rent. 

Again, the longer the lease term, the more wiggle room you will have here. 

You should shoot for 1 free month of rent for every year of your lease term. 

So if you are doing a 3 year lease, the most I would expect to get is 3 months. In my 3 year lease, I was only able to get 1 month of free rent. 

3. Plan Ahead. Get Use of Address/ Mailbox

Finally, I would definitely negotiate utilizing the address for mailing and credentialing prior to occupancy. 

As you are preparing to sign the lease, be expected to provide your personal credit history. As a new business, your business does NOT have much credit history. 

Anyways, I hope that was helpful. Have fun shopping on LoopNet and good luck.