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Rent Office Space | A Guide for Small to Medium Businesses

byCecilia Amador de San José
March 26, 2021
in CRE
Reading Time: 14 mins read
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Rent Office Space
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  • When starting your search for office space, keep in mind that there are different models to choose from: traditional, third-space providers, flexible space rentals.  
  • Flexibility has become a key consideration in the business world; when choosing your office space, keep flexibility at the top of your mind to ensure that your office space can grow with your business.  
  • One of the main benefits of flexible space is that there are no hidden costs; you pay a monthly fee for rent, utilities, and maintenance.  

  • Renting vs Leasing, What’s the Difference?  
  • How to Rent Office Space 
  • Exploring Your Options 
  • Designing Your Office Space 
  • Additional Considerations for Renting Office Space 
  • Tips and Recommendations 
  • Conclusion 

Regardless of industry or company size, many organizations throughout the years have chosen to rent office space rather than lease or purchase real estate to build out their headquarters. For years, this has proven to be a beneficial approach to corporate real estate, but times are changing and companies worldwide are increasingly interested in flexible office options.  

Why Should You Rent Office Space? 

Whether you’re an entrepreneur or a small business owner, chances are you need office space. Even if you can actually work from home, there are various benefits of having a dedicated office space.  

For one, renting office is practical as it can lead to increased productivity levels: 

  • Office space helps reduce distractions  
  • Office space provides a work environment that is conducive to productivity—workers have access to the necessary tools and resources and working alongside others that are working can have an inspiring and motivating effect on you.  
  • Office space providers workers with access to a variety of work environments that can help support different types of work.  

Renting office space is also convenient for entrepreneurs and small business owners, especially if you opt to rent flexible office space. With flexible office space, you don’t have to worry about utilities, hidden costs, or even maintenance—your flexible workspace provider will take care of that and you will only need to pay a single fee; which also makes accounting and financial planning much easier.  

Regardless whether you choose to rent traditional or flexible office space, your business stands to benefit from having a dedicated workplace. For entrepreneurs and SMEs, having an office can help your business appear more legitimate and present a more professional image—this is especially true if the alternative to renting office space is working from home or a coffee shop.  

Renting office space has also proven to be an effective strategy in helping entrepreneurs and business owners maintain work-life balance. Having an office space to go to helps professionals keep their personal and work lives separate; more importantly, it helps them disconnect from work on a daily basis.  


Renting vs Leasing, What’s the Difference? 

If you’re searching for an office space solution, you may be thinking about either renting or leasing office space.  

What’s the difference between the two and which is better? 

In simple terms, the main difference between a rent and a lease is that a lease requires a longer time commitment. Most leases require at least 12 months of contract, while a rental agreement can be as short as 30 days.  

This difference is important for entrepreneurs and small business owners, as you may not be interested in signing a 5+ year lease that can require you to take a major financial risk.  

Renting tends to be the preferable solution for this group of business people as it allows them to test the waters without incurring on any major financial risk.  

Flex Space 

Flexible space is a newer concept within the corporate real estate sector. This type of rental agreement allows for more flexibility and can provide a more financially secure to companies that don’t have large real estate needs.  

As mentioned above, when renting flexible office space, you only have to pay a set fee and don’t have to worry about managing property costs like: 

  • Utilities 
  • Cleaning 
  • Security 
  • IT 
  • Facilities management 
  • Administrative costs 
  • Business resources (printers, paper, ink, coffee, toilet paper, etc.) 

All of the above can significantly impact a company’s cashflow. Entrepreneurs and SMEs that are just starting out may find it easier to budget and plan financially if they rent flexible office space. Because they won’t need to invest in the fit out and design of the office, they can also free up some funds to invest in more pressing business areas.  


How to Rent Office Space 

Whether you’re searching to rent office space in NYC, Atlanta, Chicago, Houston, Los Angeles, San Diego, or anywhere else, here’s what you need to know.  

Before you start your office space search, you should first figure out whether or not your business truly needs office space. Some businesses only have need of a business address and the occasional meeting room; for these types of business a virtual office makes more sense than a full office rental.  

If you’ve decided that your company does need the office space, then you need to start with the obvious: 

  • Pick a location 
  • Determine your square footage requirements 
  • Set a budget 
  • Explore your options.  

Let’s look at each of these steps individually.  

Pick a Location 

When picking a location for office space, you should take the following into account: 

  • How nearby or far away it is from you 
  • Is the location easily commutable (ideally, you’ll want office space that can be reached by car, foot, public transportation, or bike).  
  • What does the surrounding area look like? Is it a business district? Are there restaurants and shops nearby? Or is it kind of secluded? 
  • Ask yourself whether your location would be attractive for employees and clients to go to.  

Picking your office space location first will help you set a realistic budget. 

Determine How Much Space You Need 

Your office space sizing requirements will play a key role in your budget, as well as your location. Figuring out how much square footage your company needs will help you filter out options and make the office space search process shorter and more efficient.  

Typically, companies need at least 100 square feet per employee. However, if your company requires manufacturing space or space for product development, you may need more space.  

Another issue you need to factor into your sizing requirements is furniture and equipment. For some businesses, this means desks, chairs, and computer/laptop space. For others, it may mean specialized equipment like 3D printer, IT setups, dashboards, etc.  

Set a Budget 

The most important part of setting a budget is that you actually stick to it when the time comes around to sign a contract.  

Ideally, you’ll do some market research to help you set a realistic budget. But a realistic budget is also about how much you can actually afford to pay month after month for office space. Keep in mind that real estate is the second largest cost for companies 

Your budget should include the following: 

  • Monthly rent 
  • Cleaning 
  • Maintenance 
  • Utilities 
  • Administrative costs.  

Explore Your Options 

Once you have a clear idea of your business needs and requirements, you’re ready to start exploring your options.  

The first step here is to decide what type of rental option you want: 

  • Traditional rental 
  • Third-space (coworking or serviced office) 
  • Flexible space rental.  

Traditional Rental 

Securing a traditional leased space can take some time, so make sure that you start your office space search with plenty of time.  

You also need to factor in elements like: 

  • Hiring architects or interior designers to help with the fit-out and layout of the space. 
  • Budget in furniture.  
  • Negotiate with suppliers (telecomms, coffee vendors, furniture, maintenance, HVAC, vending machines, etc.).  

Coworking Spaces 

Coworking spaces have grown in popularity over the past several years. They offer a plug-and-play service that allows companies to move in as soon as they want. With coworking, you can rent space for just a few weeks or even rent office space by the day.  

With a coworking space, you pay a membership fee for the amount of space you need. One of the greatest benefits of coworking spaces is that you can grow or contract as needed, without having to think about or pay for unused space.  

The main drawback of coworking for many companies is that it requires you to share your space with other companies. This means that you can’t brand the space as yours and your staff will be sharing internet and other resources with external workers.  

Flex Space  

With flex space and managed spaces, companies get the same flexibility that coworking offers, but with the added benefit that the space can be branded and won’t be shared with other companies or freelancers.  

With this option, you also have the opportunity to customize your space if you want it—you can be part of the design process and help choose furniture.  

Flex space providers usually take care of the entire procurement process, including negotiations with vendors and landlords.  

Active Search 

Once you’ve picked a location, determined your sizing needs, set a budget, and chosen your preferred type of office space, you’re ready to start the active search process.  

Depending on your choice of type of office space, you may work with a CRE agent or flex space provider. When choosing someone to help you with the search process, make sure that you pick a reputable company or individual that specializes in your preferred type of office space.  

For example, at Allwork.Space, we specialize in flexible office space rentals. We have partnered with companies like FlexSpace, Spaces, Instant Offices, and Premier Workspaces to help companies find the best office space solution.  

Our Flex Space platform gives you a wide range of helpful resources and choices when searching for cheap office space for rent.  

For example, if you’re in the New York City area, rather than searching for “office space near me”, you can visit our Flex Space platform and simply type in the city where you’re looking for office space.  

Our Flex Space platform has listings for: 

  • Small office space for rent 
  • Private office space for rent 
  • Office space for rent for a day 
  • Office space for rent by the hour 

Designing Your Office Space 

Unless you opted for a coworking space or a serviced office, your office space search will conclude with the design process.  

Once you’ve chosen a location or flexible space provider, you’re ready to start designing your office according to your needs and preferences.  

It is recommended that you work with or consult with an expert to help you design your space and maximize the square footage.  

Thoughtful workplace design can: 

  • Improve productivity 
  • Reduce costs  
  • Improve workplace efficiency 
  • Help attract and retain talent 
  • Boost collaboration.  

Additional Considerations for Renting Office Space 

Below are some frequently asked questions by people searching for office space to rent.  

  • How much does it cost to rent a workspace? 
    • It depends on various factors—location, sizing requirements, building class, building amenities—but you can expect to pay anywhere between $300 to over $3,000 depending on your specific needs.  
  • Can I live in a rented office space? 
    • Not really. Most cities have zoning laws—laws that dictate the way land can be developed and used—that prohibits living within commercial districts or buildings. Even if there are no zoning laws that prevent it, most landlords include a clause in the rent agreement or contract of how the rented space can be used; if you’re renting office space, it’s unlikely your landlord will allow for you to live there.  
  • How much does it cost to rent a small office space?  
    • It depends on locality and building type and class. Prices tend to range between $2 to $6 per square foot of rented space. 
  • Is there an Airbnb for office space? 
    • Yes. There are various companies out there that allow for you to search for office space in a similar manner to how you would search for an apartment or house in Airbnbn. Check out Allwork.Space’s Flex Finder.  
  • How much should a business pay for rent? 
    • It depends on the business’ budget and office space needs. Rather than focusing on the number, business owners are encouraged to set a budget and stick to it to prevent overspending and burning through cash.  
  • Does office rent include utilities? 
    • It depends on your landlord, flexible space provider, or what you are able to negotiate with a building owner. Generally speaking, if you sign a traditional office rental agreement, chances re utilities are not included in the price. With a coworking space or flexible space provider, utilities and other costs are included in the asking price.  

Tips and Recommendations 

  • When searching for office space to rent, always leave room for growth. This means that the space you pick should make it easy for your business to expand in the existing location.  
  • Make sure the rent agreement you are signing is clear; double check what is included in the rent price and make sure that all provisions are included in the final contract.  
  • Ask about included amenities.  
  • Ask about insurance.  
  • Don’t forget to think about your exit strategy.  
  • Tour all potential office space rentals.


Conclusion 

In the past, companies hoping to rent office space had little choice but to sign long lease agreements. This has changed significantly over the past several years. As companies have begun to demand more flexibility, the commercial real estate sector has been forced to adapt to the times.  

Flexible space is the future of commercial real estate, especially as more companies adopt hybrid work models that allow workers to work remotely. With an increase in remote work, companies’ needs for office space are changing; they need spaces that will allow them to easily grow or contract, as well as to hire space for shorter time periods.  

As you being your search for office space to rent, keep in mind that flexibility has become a key component of work—including the workplace.  

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Cecilia Amador de San José

Cecilia Amador de San José

Cecilia Amador de San José, Senior Associate Editor of Allwork.Space, is based from wherever her laptop is. She enjoys traveling and visiting new flexible workspaces.

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