A Commercial Real Estate Broker for a Small Business: Small Office, Full-Size Lease

What stays full-size on a ten-person lease

• The guarantee. Landlords usually ask the owner of a small company to stand behind the lease personally. The New York form is the good guy guarantee, which ends when the business leaves properly. Your attorney should confirm its release conditions.
• Escalations. Rent typically rises by about 2.5 to 3 percent each year, so budget on the last year and not the first.
• The deposit. A security deposit or letter of credit is held for the term unless the lease says it steps down.
• Buildout risk. Whatever the work costs beyond the landlord's allowance is yours, and the allowance shrinks as the term gets shorter.

None of these is smaller because the office is. Each is cheapest to change in the letter of intent.

What the broker does on a small lease, and what the business pays

The steps are the ones a large tenant gets: a written brief, a shortlist with sizes and asking rents, an afternoon of tours, a test fit, landlord proposals compared over the whole term, the letter of intent, and the lease alongside your attorney.

In most transactions the landlord pays the broker fee, and the commission terms of each lease settle it. An owner should still ask, before the search begins, whether anything would be due from the business and what the broker wants signed.

How much space ten people need

About 1,750 rentable square feet, at 175 square feet per person. The area you can actually use is typically 15 to 25 percent less than the rentable figure the rent is charged on, so ask for the usable number and a test fit before comparing two floors. An owner who plans to hire should allow 15 to 25 percent more.

A floor of exactly this size is not always on the market, so a ten-person search often ends on a floor with a few desks to spare. The block below shows what we list that would hold about ten people, and office space for 10 people has the full arithmetic.

Who Nomad works for on a small business's search

On your search, we work for you. Nomad also offers agency leasing and owner representation, so there are buildings it leases on an owner's behalf. Ask whether any floor on your shortlist sits in one. Where it does, that is dual agency, and a firm can act for both parties only when both have given informed consent.

Help after the owner signs

An owner-operator rarely has an office manager, so the stretch after signing matters. Where construction is needed, the drawings, the permits and the contractor are handled by Nomad's construction management team. A furnished or pre-built floor avoids that: two to four weeks from signature to move-in is usual. Once you are in, facilities management can take over cleaning, repairs and vendors.