Lease Negotiation Services for Startups: What We Do Once a Space Is in Play

The work, from the landlord's proposal to a signed lease

Once a founder says this is the floor, the work runs in a set order.

• We read the proposal against comparable deals in that building and the blocks around it, and tell you which numbers are soft.
• We ask for a proposal on a second floor you would accept, so the first landlord is competing for you.
• We write the counter and trade rounds until the economics settle.
• We record the result in a letter of intent: rent, term, free rent, the allowance or the landlord's work, security, the delivery date and the options you want.
• We work next to your attorney on the lease, checking each draft against the letter of intent.

If your startup already found the space

It happens often. A founder tours a floor from a listing site, likes it, and receives a proposal straight from the building's agent. We can still step in, and sooner is better: once a letter of intent is signed, the economics are much harder to move.

Before we start, tell us where things stand: the floors you have seen and who showed them, anything you have signed, and any terms already confirmed in writing. That shows what can still be negotiated. It also shows how a broker would be paid, because a lease commission is agreed between the landlord and the brokers on that deal. Ask on the first call, so the arrangement is clear to you before any work starts.

The four terms we press hardest for a young company

• Term length. A lease should not outlast the plan you can forecast. Shorter terms carry a higher rent per square foot, so we set a shorter and a longer term against each other on cost.
• Security and the good guy guarantee. A company without years of financials is asked for a larger deposit and a personal guarantee. We negotiate the amount, a burn-down after on-time payment, and the guarantee's notice period. What a good guy guarantee covers.
• Sublet and assignment rights. Consent not unreasonably withheld, and assignment allowed on a sale of the company. For a startup this is the way out if the plan changes.
• The improvement allowance. Sized against a contractor's estimate, with the payment schedule in writing. How an allowance is paid.

What we need from the founder, and how long this stage runs

Three things make a startup credible to a landlord and let us negotiate from strength.

• Financials: the last raise, cash on hand and, where they exist, statements. A landlord sizes the security from these.
• A headcount plan covering the next 12 to 18 months, which sets the square footage and any expansion right.
• Timing: the date you need to be working from the floor, and how firm that date is.

The letter of intent usually takes one to two weeks of rounds. The lease takes three to six weeks after that, most of it attorneys exchanging drafts. The block on this page shows floors that fit roughly 20 people, a common size for a startup at this stage.