How To Manage Leases For Your High Growth Company

A blessing in disguise: your company is outgrowing (or has outgrown) your current office. While it’s great that the company is performing well and hiring great talent, your office has suddenly become a crowded place of dread.


Maybe you started sharing desks or cubicles, created new yoga poses to fit into your downsized space, or had to (gasp!) give up your desk entirely. All you know is that the office is busting at the seams and you’re literally counting down the days to the end of your lease.

You’re not alone. Many high-growth companies are now facing this conundrum, trying to balance quick internal acceleration with constricting, longer-term leases. Fortunately, there are a number of ways to manage your leases while your company takes off.

Pick The Right Lease For You

Leasing structures offer a whole host of options, giving you the power to build out the terms you need. Some of the basic lease structures are:

  • SingleNet Lease: Tenant pays the landlord for rent and all operating expenses in lease payment.
  • Double Net Lease: Tenant pays for rent and operating expenses to the landlord, but the tenant must separately cover non-operating expenses such as property taxes and insurance costs.
  • Triple Net Lease: Tenant is responsible for utility expenses, insurance costs, and taxes separate from their rent payment to the landlord.

Triple net leases are the most flexible option because the tenant has the power to choose the terms and plans of these payment responsibilities.

Other pieces of the tenant-landlord puzzle allow for greater flexibility if you need to adjust your lease on short notice. You can adjust for the shortest lease term possible if you expect your company to grow significantly in the near-term future. You can even include an “opt-out” option in special or extreme cases, if your landlord allows it, so you can end your leasing agreement early with little harm to your permanent record. While this is difficult to obtain, the opt-out option is still something you can discuss with your landlord in the leasing agreements.

However, growth doesn’t always go according to plan. If your company doesn’t grow as quickly as expected, and your lease term ends while you still fit the space, you often have the right of first refusal. This clause gives you the power to choose if you want to stay in the space at the end of your lease before it enters the market. Thus, you’ll be able to stay in the space for another term.


Space Size Matters

In almost every commercial US market, tenants have a wide variety of options in building types, styles, locations, and amenities. Selecting a space that is flexible and has the possibility to expand is key when company growth is high. You’ll want a space that will adjust to the needs of your company as you change throughout the lease period. Perhaps, when you first move in, the nook is a welcome center for your guests; in 3 months, it can serve as another work station for your employees.

Price per square foot is a huge factor when looking at a new commercial or corporate space. Depending on location, size, type of space, or a whole host of other factors, this varies greatly across the US. According to one study, the average New York commercial space costs $6.16 per square foot, whereas Atlanta’s average rests around $1.74 per square foot. Even though the swanky office space in the middle of downtown looks nice, you should only be looking at places that serve your needs; don’t want to waste money on a space that is too expensive or too big. Try to select a space where cost per square foot is within a reasonable average or median for your location.


Know Yourself – Rent To Your Means

It is equally important to understand the internal growth and future plans of your company. Perhaps the company is planning to double the sales team in size within the next six months, or the company is slowing down its hiring initiative. Each company is on a different growth projection, so you will need to develop an individualized plan to find the space best suited to your needs.

Shared Office Spaces Are Always Available

If nothing else, use coworking spaces to your advantage. In almost every city, a whole host of shared office spaces, both local and national, offer a place for remote workers and small businesses to converge. This is a networking and social opportunity, so take advantage!

Although no two businesses are alike, high growth companies all face the same battles. With these leasing and space options, you’ll be able to find a solution perfect for your company.


Leave a Comment

Your email address will not be published.