Commercial Leasing for Startups: The First 30 Days With a Brokerage Firm

Week one: a call within the hour, a first shortlist within 24 hours

Day one: you send headcount, timing and budget, and the first call comes back that hour if you wrote during business hours. By day two the shortlist can be in your inbox. A proper one shows each floor's address, size and asking rent, says whether the space is raw, prebuilt or furnished, and gives the earliest move-in date. A list of neighborhoods with price ranges is not a shortlist. What to send, and what comes back describes the exchange.

Week two: one tour afternoon, with the Financial District as the example

A first tour takes in three to five floors, which is one afternoon's work when they sit in the same part of town. The block below shows the Financial District floors on offer through Nomad as an example of a single afternoon: one compact district around the transit hub at Fulton Street. Your broker should arrive with one page per floor and leave with your ranking. The tour checklist lists what to look at on site.

Weeks three and four: proposals, then the letter of intent

After second visits to the floors that survived, your broker asks each landlord for a proposal. What reaches you should be a comparison, not a stack of PDFs.

• Every proposal converted to effective rent across the term, with free rent, the allowance and escalations counted.
• A buildout estimate and a construction timeline beside each floor, raised now and not after the lease.
• A recommendation, with the reasoning written down.

The strongest proposal is then negotiated into a letter of intent. A startup that decides quickly can reach that point within a couple of weeks of its first tour.

Signs in the first two weeks that you hired the wrong firm

• Most of the shortlist belongs to a single owner, or to buildings the firm itself leases, with no explanation.
• Deadlines appear from nowhere. Floors do get taken, but a broker who invents urgency is negotiating against you.
• The senior broker from the pitch has stopped appearing, and nobody said who took over.
• The floors on the list carry no asking rents.

One of these deserves a direct question. Two deserve a look at the agreement.

Switching firms: what the term and the exit say

Read two clauses in whatever you signed: the term, meaning the date the arrangement ends, and the exit, meaning how either side can end it sooner. Check too whether the firm is owed anything on floors it has already shown you. If the agreement is exclusive and has no exit, raise the problem in writing and ask to be released; your attorney can confirm where you stand. Before the next firm starts, us included, ask to see what it wants signed and read those same two clauses first.