Discover The Hidden Costs Of Leasing An Office Space

commercial real estate Corpus Christi
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After a long search, you have finally found an office space that ideally fits and fulfills your entire business requirement. And you are happy that the monthly rent is also quite low. But be aware. Cheap office space can unnecessarily turn out to be expensive if you fail to understand the hidden costs and restrictions that are buried in many leases. People easily fall into the trap of getting cheap office space and then end up paying huge amounts of other expenses. So before signing on the dotted read and understand the lease agreement under the guidance of a commercial real estate Corpus Christi. Consider the other expenses that come along with the cheap price tag that will make your deal an expensive one.


Following are the different hidden expenses that one should pay attention to while leasing an office space.

  • Rentable square feet:

    The monthly rent is mostly calculated based on the rentable square footage rather than the usable square footage of the office space. Rentable areas often include a portion of elevators, columns, janitors, closets, lobbies, stairways, and other shared areas. Also, many landlords adapt their method of calculating the square foot as per their whims. So the office space that seemed cheap initially would turn out to be an expensive one with higher monthly rents. To ensure that you do not end up paying a higher rent, talk with your commercial real estate and ask for a breakdown of the areas that will be included in rentable square footage. Avoid buying offices having embellished interiors such as curved walls, sharp angles, and an abundance of columns. All this will increase your monthly rent.
  • Maintenance and upgrades:

    Maintaining a commercial property is an important task and the cost can adversely affect your monthly profits. The lease contract should give a clear understanding as to who’s responsible for bearing the maintenance cost. Full service or double rental agreement makes the landlord responsible for the maintenance cost whereas a single contract specifies that the tenant has to pay for the office maintenance. If the lease agreement is not clear about the maintenance clause then it is likely that you may end up paying for snow removal, parking lot upkeep, mowing of a lawn, and sidewalk maintenance. These hidden costs can come as a surprise and add to your monthly expenditure. Thus, with the help of property management Corpus Christi clarify the maintenance clause with your landlord at the onset.

Similarly, making improvements to a property is necessary to prevent it from deteriorating. To ensure their smooth functioning, utilities have to be upgraded. Upgrading and improvement costs usually run into thousands of dollars and have a setback on the business. So before putting the ink on the paper, ensure that the lease agreement specifies who’s responsible for improvements and upgrades. In a multi-tenant office building, you are only responsible for maintaining and repairing the parts that fall in your space. Repairing and maintaining the building’s exterior and common area is always the landlord’s responsibility.

  • Rent increase:  

    As per the law, all landlords are allowed to increase the rent yearly. This rent hike is based on inflation or consumer price indexes and has no cap. Thus, there can be a sudden skyrocketing increase in rent. So the office space that was found cheap initially may become an expensive affair in the future. Therefore, negotiate the rent hike cap and get it mentioned in the agreement before signing it.
  • Property Taxes:

    The lease agreement determines who is responsible for paying the property tax. Generally speaking, as you do not own the property you should not be responsible for paying the property tax. But mostly the landlord passes on the property tax to the tenant. And as it is not a monthly expense, you tend to forget to make provision for it and it may result in unexpected cash outlays at the end of the year-end. Also, understand the tax clause and clarify with your real estate agent that the tax clause makes you liable only for a portion of your space’s property taxes. You need not pay for other real estate taxes such as charges for new sidewalks, new sewer lines, and so on.
  • Operating expenses:

    Operating expenses can come as a surprise hidden cost and could scare you. Certain operational charges passed on to the tenants are electricity, gas, water, and internet charges. But as operating expenses allow the landlord to recover some out-of-pocket expenditure, some landlords use the operating expense clause as a profit center. They recover advertising, refurbishing, landscaping and structural maintenance costs, mortgage or interest fees from the tenant under the pretext of operating expenses. When a single meter is used among different tenants, electricity charges are hiked. So at the onset ask the landlord to outline the expenses that will be passed on to you as operating expenses.
  • Pre-existing condition:

    Some lease agreements require you to return the office space in its original condition once you have vacated. This becomes difficult for offices that have made new additions, upgrades, or aesthetic alteration. The cost of striping these alterations can be quite high and you may end up paying a higher bill while moving out.

Conclusion:

The above points will help you to understand the hidden costs and restrictions that are buried in many commercial leases. It will save you from scary surprises of extra chunks on your business budget. With the help of realtors in Corpus Christi, TXnegotiate your office lease and avoid making it unnecessarily expensive. 

If you are looking for office space for sale or industrial real estate, or if you are looking to buy a commercial property for sale in Corpus Christi, simply follow the professional realtors commercial properties listing to find the best deal.

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