When you embark on the journey of finding office space, it’s essential to recognize the diverse models available: traditional, third-space providers, and flexible space rentals. Flexibility has become a paramount consideration in today’s business landscape. Keeping it top of mind ensures your chosen office can seamlessly adapt and grow alongside your enterprise.
A significant advantage of flexible space is its transparency: you typically pay a single monthly fee covering rent, utilities, and maintenance, eliminating hidden costs.
This guide will delve into:
- Renting vs. Leasing: What’s the Difference?
- How to Rent Office Space
- Exploring Your Options
- Designing Your Office Space
- Additional Considerations for Renting Office Space
- Tips and Recommendations
- Conclusion
Regardless of their industry or size, many organizations have historically opted to rent office space rather than lease or purchase real estate for their headquarters. For years, this approach proved beneficial for corporate real estate. However, times are changing, and companies worldwide are increasingly gravitating towards flexible office solutions.
Why Should You Rent Office Space?
Whether you’re an entrepreneur or a small business owner, the need for office space often arises. Even if working from home is feasible, a dedicated office offers numerous advantages:
Renting an office is practical as it can significantly boost productivity levels:
- Reduced Distractions: An office environment minimizes household interruptions.
- Conducive to Productivity: Workers gain access to necessary tools and resources, and the presence of other working individuals can be inspiring and motivating.
- Diverse Work Environments: Office space providers often offer a variety of settings (e.g., quiet zones, collaborative areas) to support different work styles.
Renting office space is also highly convenient for entrepreneurs and small business owners, particularly if you choose flexible office space. With flexible options, concerns about utilities, hidden costs, or even maintenance are alleviated—your flexible workspace provider handles these, and you pay a single, inclusive fee. This simplification also streamlines accounting and financial planning.
Whether you opt for traditional or flexible office space, your business stands to gain from having a dedicated workplace. For entrepreneurs and SMEs, an office can enhance your business’s legitimacy and project a more professional image, especially when compared to working from home or a coffee shop.
Renting office space has also proven an effective strategy for helping professionals maintain work-life balance. Having a distinct office to commute to helps individuals separate their personal and professional lives, and crucially, enables them to disconnect from work at the end of the day.
Renting vs. Leasing: What’s the Difference?
If you’re exploring office space solutions, you’re likely considering either renting or leasing. But what sets them apart, and which is the better choice for you?
Simply put, the primary distinction is the length of commitment. A lease typically requires a longer-term contract, often 12 months or more, whereas a rental agreement can be as short as 30 days.
This difference is critical for entrepreneurs and small business owners who might be hesitant to sign a 5+ year lease that could entail significant financial risk. For this group, renting tends to be the preferred solution, allowing them to test the waters without incurring major financial exposure.
Flexible Space
Flexible space is a relatively newer concept within the corporate real estate sector. This type of rental agreement offers greater adaptability and can provide a more financially secure option for companies that don’t have extensive real estate requirements.
As noted earlier, when renting flexible office space, you pay a fixed fee and are freed from managing various property costs, such as:
- Utilities
- Cleaning
- Security
- IT support
- Facilities management
- Administrative costs
- Business resources (e.g., printers, paper, ink, coffee, toilet paper)
All these elements can significantly impact a company’s cash flow. Entrepreneurs and SMEs, especially those just starting, may find it much easier to budget and plan financially with flexible office space. Since they don’t need to invest in the initial fit-out and design of the office, they can also free up funds to invest in more pressing business areas.
How to Rent Office Space
Whether you’re seeking to rent office space in major cities like London, Manchester, or Edinburgh, here’s what you need to know:
Before commencing your office space search, first ascertain whether your business truly requires a physical office. Some businesses only need a professional business address and occasional meeting room access; for these, a virtual office makes more sense than a full office rental.
If you’ve determined that your company does need dedicated office space, then you should begin with the fundamentals:
- Pick a Location
- Determine Your Square Footage Requirements
- Set a Budget
- Explore Your Options
Let’s examine each of these steps individually.
Pick a Location
When selecting an office space location, consider the following:
- Proximity: How close or far is it from your home or key personnel?
- Commutability: Is the location easily accessible by car, foot, public transportation, or bike?
- Surrounding Area: What is the neighborhood like? Is it a bustling business district, or more secluded? Are there nearby restaurants, shops, or other amenities?
- Attractiveness: Would the location be appealing for both your employees and clients to visit?
Choosing your office space location first will help you establish a more realistic budget.
Determine How Much Space You Need
Your office space sizing requirements will significantly influence your budget and even your location choices. Figuring out the necessary square footage will help you filter options, making the search process shorter and more efficient.
Typically, companies allocate at least 100 square feet per employee. However, if your company involves manufacturing or product development, you may require considerably more space.
Another crucial factor for your sizing requirements is furniture and equipment. For some businesses, this means standard desks, chairs, and computer/laptop space. For others, it might involve specialized equipment like 3D printers, custom IT setups, dashboards, etc.
Set a Budget
The most vital aspect of setting a budget is to actually adhere to it when it’s time to sign a contract.
Ideally, conduct some market research to help you establish a realistic budget. However, a realistic budget is also fundamentally about how much your business can genuinely afford to pay month after month for office space. Keep in mind that real estate is typically the second-largest cost for companies.
Your budget should ideally include:
- Monthly rent
- Cleaning
- Maintenance
- Utilities
- Administrative costs
Explore Your Options
Once you have a clear understanding of your business’s needs and requirements, you’re ready to start exploring the available options.
The first decision here is to choose your preferred type of rental option:
- Traditional Rental
- Third-Space (Coworking or Serviced Office)
- Flexible Space Rental
Traditional Rental
Securing a traditional leased space can be time-consuming, so ensure you begin your office space search with ample lead time. You’ll also need to account for elements like:
- Hiring architects or interior designers for the fit-out and layout.
- Budgeting for furniture.
- Negotiating with various suppliers (telecoms, coffee vendors, furniture, maintenance, HVAC, vending machines, etc.).
Coworking Spaces
Coworking spaces have seen a surge in popularity. They offer a “plug-and-play” service, enabling companies to move in almost immediately. With coworking, you can rent space for just a few weeks or even by the day.
A major benefit of coworking spaces is the ability to easily scale up or down as needed, without having to pay for unused space. The primary drawback for some companies is the shared environment, meaning you can’t fully brand the space as your own, and staff might share internet and other resources with external workers.
Flexible Space (Managed Spaces)
With flexible space and managed spaces, companies gain the same flexibility as coworking but with the added advantage that the space can be branded and will not be shared with other companies or freelancers.
This option also allows for customization if desired – you can be involved in the design process and help select furniture. Flexible space providers typically handle the entire procurement process, including negotiations with vendors and landlords.
Active Search
Once you’ve selected a location, determined your sizing needs, set a budget, and chosen your preferred type of office space, you’re ready to commence the active search.
Depending on your chosen office space type, you may work with a commercial real estate (CRE) agent or a flexible space provider. When selecting someone to assist with your search, ensure you choose a reputable company or individual specializing in your preferred type of office space.
For instance, at Allwork.Space, we specialize in flexible office space rentals. We partner with leading companies like FlexSpace, Spaces, Instant Offices, and Premier Workspaces to help businesses find optimal office solutions. Our Flex Space platform offers a wide range of helpful resources and choices for finding affordable office space. For example, rather than searching for “office space near me” in a city like London, you can simply use our platform to type in your desired city.
Our Flex Space platform features listings for:
- Small office space for rent
- Private office space for rent
- Office space for rent for a day
- Office space for rent by the hour
Designing Your Office Space
Unless you opted for a coworking or serviced office, your office space search will culminate in the design process.
Once you’ve chosen a location or flexible space provider, you’re ready to begin designing your office to meet your specific needs and preferences. It’s advisable to work with or consult an expert to help design your space and maximize its square footage.
Thoughtful workplace design can:
- Improve productivity
- Reduce costs
- Enhance workplace efficiency
- Help attract and retain talent
- Boost collaboration
Additional Considerations for Renting Office Space
Here are some frequently asked questions from individuals searching for office space to rent:
- How much does it cost to rent a workspace? This varies based on location, sizing requirements, building class, and amenities. You can expect to pay anywhere from £300 to over £3,000 per month, depending on your specific needs.
- Can I live in a rented office space? Generally, no. Most cities have zoning laws that prohibit residential use within commercial districts or buildings. Even without specific zoning restrictions, most landlords include clauses in the rental agreement or contract specifying how the rented space can be used; it’s highly unlikely your landlord would permit living there.
- How much does it cost to rent a small office space? Prices typically range between £2 to £6 per square foot of rented space, depending on locality, building type, and class.
- Is there an “Airbnb for office space”? Yes. Several companies allow you to search for office space in a similar way to searching for accommodation on Airbnb. Check out Allwork.Space’s Flex Finder for such options.
- How much should a business pay for rent? This depends on the business’s budget and office space needs. Rather than focusing on a specific number, business owners are encouraged to set a budget they can realistically afford and stick to it, preventing overspending and cash drain.
- Does office rent include utilities? It depends on your landlord, flexible space provider, or what you can negotiate. Generally speaking, if you sign a traditional office rental agreement, utilities are often not included. With a coworking space or flexible space provider, utilities and other associated costs are typically included in the quoted price.
Tips and Recommendations
When searching for office space to rent:
- Always leave room for growth. The space you choose should facilitate easy expansion within the existing location.
- Ensure the rent agreement is clear. Double-check what is included in the rent price and confirm that all agreed-upon provisions are explicitly stated in the final contract.
- Ask about included amenities.
- Inquire about insurance requirements and coverage.
- Don’t forget to think about your exit strategy from the space.
- Tour all potential office space rentals in person.
Conclusion
In the past, companies seeking to rent office space had limited options, often requiring them to sign lengthy lease agreements. This has fundamentally changed over recent years. As businesses increasingly demand greater flexibility, the commercial real estate sector has been compelled to adapt.
Flexible space represents the future of commercial real estate, especially as more companies adopt hybrid work models that allow employees to work remotely. With the rise of remote work, companies’ needs for office space are evolving; they require spaces that enable easy growth or contraction, as well as the ability to rent space for shorter periods.
As you begin your search for office space to rent, remember that flexibility has become a core component of modern work—including the physical workplace itself.