Complete Guide to Rent an Office Space & Why You Should Not Do It!

Are you planning to build your office space in NJ for your company? Every growing business reaches a point where one day they have to decide if they would like to buy an office space or lease it.

Although buying an office space might seem like a better option initially, there are a lot of factors that you will need to consider – money being the most important of them all.

Therefore, if you are not backed up with enough cash for this plan, it might turn out to be an exercise in futility.

So, to help you with your decisions, I have put together this post that will clear all your doubts regarding buying offices spaces in NJ.

So, let’s cut to the chase and dive straight in!

Factors to Consider When Building/Buying/Leasing/Renting Office Spaces

Decision Factors

• Availability of Suitable Space
• Urgency of Need
• Duration of Need
• Flexibility
• Services
• Cost
• Type of Funding
• Funding Availability

Renovate

• Space available but not suitably configured or finished
• Within 3-6 months, or longer for larger projects
• Intermediate or long term
• Space needs are expected to be constant for proposed program
• Services to be provided by Business Unit
• Present Value Analysis supporting lowest cost option
• Departmental funds, internal loan, or bond financing available
• Planning and construction funds available as needed

Lease

• Suitable rentals available, competitive market
• Immediate to 3 months
• Unknown, short term, or long term
• Program is expected to expand or contract over time
• Services provided by landlord or available in the vicinity
• Present Value Analysis supporting lowest cost option
• Internal loan, operating funds or grant funds available
• Available over time

Buy

• Suitable facility available for sale, priced within appraised values
• 3 months—6 months
• Long term
• Space needs are expected to be constant—either for proposed program, or future needs
• Services available in the vicinity or to be provided by Business Unit
• Present Value Analysis supporting lowest cost option
• Internal loan (inexpensive facility), revenue bonds (expensive facility), or reserves available
• Funding or financing available at closing

Build

• No suitable facility available
• 6 months +
• Long term
• Space needs are expected to be constant—either for proposed program, or future needs
• Services to be provided by Business Unit
• Present Value Analysis supporting lowest cost option
• Internal loan (inexpensive facility), revenue bonds (expensive facility), or reserves available
• Planning and construction funds available as needed

What Do You Need to Build an Office Space?

Other than the manual labor and the bricks, there are a lot of other services that you will need if you are planning to build your. office space in NJ.To begin with, you will need a proper team. Here is a list of professionals you will need. Each of them will have a specific role to play in helping you build your office space.

• A Tenant Rep- This is a broker who represents you. To explain better, the tenant representative, also called the tenant broker is a person who helps buyers locate the most suitable commercial property for the business. Their job is to let you know about any space that is available and real estate market conditions.
• A Designer - This person will help you prospect your office project. Basically, this person helps you both design the look of the office to make it look great and also have the complete functionality it needs.
• A Contractor - This person will help you price your office project.
• An Insurance Agent - This person will help you obtain insurance on the office space in NJ. And if you decide to ignore the insurance for this, then you will be in trouble in the future in case anything happens. So, again, you need this person to help you with building your office space.
• A Lawyer - The lawyer will help you in making the right decisions and handling all the tax details as well as legal papers for the office space in NJ that you are about to build.
• An Architect - To design your building/floor and have it built properly.
• A Banker - Let us say that you need a loan or some help, a banker is someone you will need to help you out.
• An Accountant - The accountant will help in balancing the sheets and noting all the expenses put into building the office.
• An Engineering Team - To set up parts of the office like the installation of the generator along with many other things.
• An HVAC Team - With an office, you will need air conditioning and proper ventilation. For that, you need an HVAC team to help you out.
• A Licensed electrician - You will need the lighting and everything is taken care of and for this, an electrician is needed.
• Project Manager - You will also need a person who will supervise the complete building of the office space in NJ for you. The project manager is just for that.
• A Permit Expeditor - For you to be able to run an office in a place, you will need a few permits or maybe at least one permit from the government. That is where the permit expeditor will help you.

Building Your Office Space in NJ

Now, with all these people hired and in place, you are ready to build your office space in NJ. Also, if you’d have checked with your accountant, you now don’t have much funds to work with.

But, let us say that you find a way to get around this as well and move ahead with the plan. Well, then, I would like to help you here so that you do not spend too much on building your office space in NJ.

So, you will first have to start searching for a place. As soon as you find the place, your broker will present the LOI to the landlord.

Note: LOI is the Letter of Intent. It is a legally binding agreement document that outlines the understanding between any two parties and what understanding do they intent to formalize. It is a non-binding contract that puts forward all the terms of the lease or purchase on it for both parties to agree and sign on. For getting a sample of an LOI, click here.

A good tenant rep broker will help get through all of the negotiations but you have to know what you want. The lesson I learned was if I worked with an engineer, an electrician, and an HVAC guy to scope the work, I could have negotiated a favorable TI. A seasoned accountant would help you with the financial and tax impacts of the lease.

What is TI? – This is real estate Jargon for Tenant Improvement. Some landlords could fronts you cash to build out the office in exchange for a longer-term on the lease and higher rent.

Once you have the terms negotiated, the contracting part starts. An average commercial office lease is about 100 pages. So, you will need to hire a good lawyer. It is key if you want to get everything right.

Don’t call your cousin Vinney or aunt Julie because they own some real estate. THIS IS SERIOUS BUSINESS. A good lease can be an asset to your business. So, it is better to get a third-party and certified lawyer for this.

‍Here are a few things you should keep in mind (tips to help you when you are making a deal with the landlord for building your office space in NJ):

• Negotiate out of union trades.
• Landlord to pay for all elevator fees.
• Landlord to pay for all building integration.
• If you are building the space, ask the landlord to demo the space, provide Air Ducts and fireproof the roof.
• Negotiation should not be time-bound.
• Remember to negotiate at several locations.
• Best and final is NOT real.
• The Landlord should pay the PMO directly. It helps them.

Did You Know a Lease can actually end up on your Balance Sheet?

Well, it is better for you to talk to the council and your tax guy to be on top of this. In fact, if you need one, we can help you. Just give us a call.

With this cleared and the lease review taking place, you will now need to work on the floor plan. For this, you can begin a design competition on ArcBazar. This will help you get your design done and save a lot of money as well.

You can eventually put this money for better use later on then. With many design options in front of you, pick the one that you like the best and take it to your architect.

Now, it is time for the architect will make your plans. And while that is happening, the PMO can start to price out the project. Another thing that I would like to share from my experience is that – there are PMO’s that could give you a 300% return on the fees they earn. This means that if you pay them $20,000, they will help you save $80,000.

Note: This did not work for me, although PMO is good. The reason it didn’t work was that I was cutting costs as much as I could.

With all explained above, this is just the beginning of building your own office space in NJ instead of leasing a coworking space. In fact, there are many more contracts you will need to work on a pay for. These include:

1. Design Contract
2. Construction Contract
3. Furniture Lease Contract
4. Refreshment Contract
5. AV Contract
6. Phone Contract
7. Internet Contract
8. Printer Lease Contract
9. Space assignment

The list does not end here. Also, by the time you open your office and you want your employees to come to the office space in NJ, you will learn that a few of them like to “work from home”.

The happiness that comes with building your own office space will not last for long once you realize that you’ve burned multiple holes in your pockets in the pursuit of creating your own space.

Furthermore, you will also realize that the space you just created is not entirely yours. The land is owned by someone else. Everything you did belongs to the landlord. And with you being over budget, you will be highly exhausted both in funds and energy.

I feel bad to break it to you like this, but you will not be able to help your company grow without money. All the amount that you are spending to build the office space in NJ, why not use it to grow your company before you start building your space?

The Verdict

Finally, if you are still up for building your office space, I would like to wish you the best of luck because, well, you need it.

But if you want to grow your business and focus on other important things, then you are doing the right thing by opting to use a coworking space with us until your company has reached a good place to have its own land and building.

So, save your time and money by calling us at WorkSocial today. When you do call, ask for Natasha. She will set up your day office rentals space, help you with all that you need and do it with a smile.

Just so you know, WorkSocial is America’s only Minority-owned Coworking Space that is operated exclusively (99%) by women. Hence, you can feel secure and know that you are in the right place and in the right hands.

To learn more about our enterprise options, please call us at (201) 210-8255 and do not forget to ask for Natasha at WorkSocial. She’s the best!

We will be waiting to help you out with a great Coworking Office Space !