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What Are The Available Office Space Options And Which Is The Best Type For My Business?

When companies start to consider new office space or relocating from their current office, quite often the decision makers aren't aware of all the available options in their market.

Knowing which office properties have vacancies is a journey in itself, but also being aware of the different types of office space is something that a lot of business today struggle with. Small businesses, entrepreneurs and even larger companies are often unclear on how many choices they really have. Below is a guide to help differentiate the types of office space and clarify what types of office properties are the best fit for certain businesses.

Executive Suites
Is a set of individual offices sublet from a larger suite of offices with a shared receptionist, common area, conference room(s), and often a kitchenette and copy/fax area. Executive suites are ideal for individuals or 2-3 person companies looking for maintained and managed space with several optional amenities and flexible lease terms. Most executive suites will also offer virtual office solutions, which is essentially being able to utilize the location's physical address and phone/data services from a remote location. Stay at home businesses and the mobile workforce get the most use out of virtual office solutions.

Made Ready Office
Is standard office space that contains new carpet and fresh paint and can be moved into right away with no additional tenant improvements necessary. This kind of space is growing in popularity with companies containing 3-8 employees as office space becomes more and more commoditized in B and C class office buildings. Landlords will prepare the suite to be ready for move-in before they have a lease in place with a tenant. Made ready offices typically have very short leases with more boilerplate terminology and there aren't a lot of negotiating points to consider. Like executive suites, it's all about price and location.

Traditional Office Space
Can be found in most office buildings and has the most wiggle room to negotiate terms and concessions with the landlord or leasing agent. Traditional office space can typically accommodate smaller businesses with 3-5 employees all the way up to larger companies with 100's or even 1000's of employees in need of entire floors. The leases are much more complex and there are usually many more negotiating points to cover, such as how much the landlord is willing to contribute to any sort of remodel required in the suite (usually depends on how long of a lease the tenant is willing to sign). It's usually recommended that a tenant broker be engaged by the prospective tenant because of the complexities of a traditional office lease and because of how many choices there are in a given market. Rental rate and tenant improvement concessions are only part of the equation, there are many more clauses within the lease that can end up costing the tenant thousands of dollars throughout the life of the lease.

Sub Lease Space
Is the process by which an existing tenant of real estate leases out his/her space to another tenant with the landlord's consent, while maintaining responsibility of the original lease agreement. Based on when the original lease expires and the desirability of the office space for rent, savings can often range between 15% and 40% under typical vacant office market rates. It would be tough to get say, Class A office space at Class B rates but the savings are clearly there. The rental rate discount isn't the only appealing part of subleasing, as spaces available for sublet often only have 3 or few years remaining on the original lease term. Flexibility is paramount for start-up companies and other existing businesses in need of some lease term wiggle room. Companies looking for sublease space may also get lucky and find a sub-lessor willing to leave furniture behind for the sub-lessee to use, which is a huge coup for the new office tenant.

Coworking Space
Is generally an open space concept with desks and work areas that independents or small businesses can rent for short periods of time. Length terms run the gamut from hourly to monthly, and this type of space typically appeals to creative types like software developers, graphic designers, writers, etc. One goal of coworking space is to promote collaboration amongst the different businesses types so that value is gained not just from their physical presence in the facility, but also from their 'hanging around' other people looking to work in a more social and collegial environment. Coworking is very popular on both the east and west coasts and is beginning to gain traction in other U.S. cities like Austin, Chicago, Denver, and even Vancouver.

For more discussion and help with finding and renting space for your business, be sure to check out TheSquareFoot.


Planning an office move? Go the office relocation planning resource center

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