Guide To Determine Which Lease Term Is Best For You

The typical lease term length can vary depending on market conditions, current vacancies, and future developments. However, there are benefits and disadvantages to signing a short-term (3 years or less) lease or a long-term (7 to 10 years) lease.

It is important to remember that landlords will require longer lease terms for more competitive markets. We will discuss the advantages of different lease lengths to help you choose which one is best for your next office space.

The Benefits of a Short-Term Leasing

A short-term lease is more appropriate for small businesses that are still growing and who want flexibility over stability.

A short-term lease is best for businesses that need the flexibility to expand or reduce their size. Longer leases may limit your company's growth potential.

If the office space is no longer needed, a short-term lease can be advantageous. You don't have to lease the area under a long-term contract. This will allow you to avoid paying the possible expenses of subleasing the space or terminating the lease early in the case of a move.

The Benefits of a Lease

Long-term leases can give established businesses financial and logistical stability. They also allow for greater negotiation power with landlords during lease negotiations.

You can benefit from signing a longer lease if you expect rental rates to rise in your area.

This is especially true for stable businesses with clearly defined growth plans and who prefer to lock in a favorable rental rate.

This is also true for growing businesses. You can negotiate expansion rights in your lease to allow your company to expand over the term of your lease.

You can also avoid moving costs by leasing long-term offices. These can include technology and other infrastructure costs, lost productivity, additional moving and furniture costs, and increased costs for office construction.

Make Larger Concessions

You can use a longer lease to get more concessions from your landlord if your company doesn't need flexibility during its lease term.

The landlord can spread the cost of the long-term lease over several years to offer more concessions. These could include a higher tenant improvement allowance, discounts in rent rates, building signage rights, and better rental rates.

There are many ways to structure a lease that suits your business. A qualified agent can help you decide which type of lease is best for your business and recommend the best market options.