Lease Options For When You’ve Outgrown Your Space
So you’ve been fortunate enough to scale your company and continue to hire on new employees, but there’s just one problem. Your leased space is now too small! A cramped space won’t do when your team is trying to be productive and professional for clients. In this article, Transworld Commercial Real Estate will outline the typical lease options for a business to lease space in Colorado.
A Direct Lease
When you think about leasing commercial real estate in Denver, a direct lease is typically the lease option idea that comes to mind. A direct lease uses a leasing agreement that outlines the terms of the lease between the landlord or property owner and the lessee (or occupier of the property). The lease agreement will include the rental rate, fees included, the length of the agreement, renewal options, and all other lease terms.
A direct lease is good for a business with long term plans and will allow for some degree of flexibility with the space build out. But lease terms can also be relatively inflexible with this type of traditional lease so engaging a professional commercial real estate broker, like a tenant representative, will be helpful in attaining favorable negotiations.
Leasing Coworking Space
Leasing coworking space in Colorado is becoming more and more standard practice, but it is still a relatively new office lease option. Coworking spaces can offer immense flexibility when it comes to lease terms. This can be a great option if you’re a new business and unsure of your space requirements in the long term, or can be a perfect lease opportunity if you’re looking to purchase commercial real estate but the right building has not been identified just yet.
There are certainly interesting perks to a coworking space like onsite networking, no need to buy furniture, and access to printers and community spaces. But there can be drawbacks too, like limited privacy and added fees as your company continues to grow larger and larger.
A sublease option is technically still a traditional lease, but it is unique due to the need of a tenant to lease the space before their lease terms have been completed. Because of this there can be some real flexibility in lease terms, but also great perks like a fast move in date and furniture included. For a growing company, cash reserves are king, and a subleased office space can often be leased at below market rental rates, even for larger spaces.
Subleases can be great for a company that only needs the space for a year, or if the business is new to the city and is unsure where they would like to finally land. The availability of subleases is going to be more limited than direct lease spaces, and often a landlord is not motivated to complete the transaction since they already have a leasing agreement in place.
How to Choose a Lease Option?
Whether you’re a young company or highly established, working with a commercial real estate broker to navigate the Colorado commercial real estate market is a great way to ensure you make the right decision for your company. The right leasing option will depend on your company’s growth plans, unique needs, and even the company culture you’re trying to cultivate.
If you would like to discuss the 3 lease options, direct leasing, coworking spaces, or subleases, in the Denver market, we invite you to call Transworld Commercial Real Estate to speak with one of our expert commercial brokers and decide your next steps.
Rachael Holstein is the Marketing Manager for Transworld Commercial Real Estate, a full service commercial real estate firm in Denver, Colorado. Her work experience has been largely focused on business development and marketing in business brokerage, finance, architecture, property management, and information technology. A long time resident of Cleveland, Ohio, she attained her undergrad from John Carroll University and her Master’s Degree from Cleveland State University. In 2013, she relocated to Denver with her husband, Joe, and her furry companions to explore the mile high lifestyle! Visit transworldcre.com for more information.