If you’ve ever signed an office space lease before, you’re likely familiar with the rigidity of the process.
You can negotiate—to some extent—your rent and lease length as well as responsibilities for repair and maintenance and any concessions like free rent periods and tenant improvement (TI) allowances.
But here’s where it gets sticky: when it comes to traditional leases, you generally only have the leverage to negotiate because you’ll be locked into a fixed-term agreement for multiple years.
And in a rapidly evolving professional landscape that’s made multiple-year planning an anachronism, it can be hard to grapple with the idea of committing to a lease that limits your operational agility.
There’s a silver lining, though: foregoing a long-term traditional lease doesn’t prohibit you from negotiating your ideal workplace arrangement.
On the contrary, flexible workspaces let you negotiate the terms that work best for you—and save you from having to negotiate with others.
Here are a few things you might not have known you could negotiate in a flexible office agreement and some others you don’t need to negotiate at all.
Four things you can negotiate in a flexible office agreement
When it comes to flexible office space, the operative word is flexible. Unlike traditional leases, your ability to negotiate doesn’t rely on stringent multi-year terms.
You can get optimal value while still maintaining your company’s agility.
If you’re exploring a flexible office space, approach your discussions with the operators with a focus on fine-tuning the following facets of the deal.
1. Pricing
While most flexible office space providers have set pricing for their available suites and memberships, you may be able to negotiate improved rates if you sign on for a longer commitment.
You may also be able to negotiate free rent periods if you plan to stay for a significant period of time.
2. Agreement length and termination
Traditional office leases are typically for terms of between three and five years. And for many organizations—especially those with ambitions for growth—the idea of being locked in for that long can be daunting.
With a flexible office space, you can negotiate the agreement length that works best for you—whether it’s a period of months or years.
While you might not be able to break your agreement, you do have the ability to sign an agreement that better aligns with the timeline you’re comfortable with and then terminate or extend your agreement as you see fit.
3. Office size and scalability
What did your business look like five years ago?
There’s a good chance it’s changed and grown dramatically since then. And, ideally, it will continue to do so in the years to come.
As it does, what will your workplace needs be?
If you add 20 staff in the next two years, will you have enough space in your office to accommodate them?
In a traditional lease environment, this problem would be a lot more challenging to solve. But, in a flexible office space, you can negotiate scaling into a new space as your needs dictate.
If your business grows, your office can grow with you.
4. Relocation
In the same way your business may grow, it may also need to move. If you encounter the need to relocate to another city, you may be able to negotiate a move to another of your flexible office space provider’s locations.
For example, iQ Offices has seven locations in markets across Canada so we can support our members if they need a new home for their company.
Two things you don’t need to negotiate in a flexible office agreement
Just as important as the things you can negotiate in your flexible office agreement are the things you don’t need to negotiate.
1. Tenant improvements and customization
While Tenant Improvement allowances seem like a win when you’re signing a traditional office lease, it’s all a matter of context.
Think of it this way: no matter how much of a TI allowance you negotiate, it ultimately means that you still have to invest your own capital and time into improving a space that you don’t ultimately own.
This is a textbook sunk cost.
However, there’s no need to think about TIs with flexible office space because your space is fully built out.
Flexible office suites come fully furnished and equipped with all the essentials your team needs. Your agreement also includes unique branding opportunities so that your workspace looks and feels like your very own.
Rather than spending weeks or months building the space to your specifications, you can sign an agreement and have your team in your new workspace in a matter of days, not months.
2. Maintenance, repairs, amenities, and utilities
Depending on your traditional office lease type—whether it’s a Triple Net Lease, a Gross Lease, or a Modified Lease—you will likely be liable for all or some portion of the property-related expenses, including maintenance, repairs, and utilities.
This is negotiable to some extent, but you can expect to incur some additional costs above and beyond your lease.
Flexible workspaces eliminate the need for these negotiations through the provisions of all-inclusive pricing—the price you’re quoted is the price you’ll pay each month and there are no hidden costs or fees to catch you off-guard.
Before you sign a lease on a new home for your business, it’s important to think about what you want out of the workspace.
Don’t pigeonhole yourself into a rigid, inflexible traditional office space lease because you think it gives you your best chance to negotiate the office you want. Flexible offices also allow you to negotiate the perfect workspace—with far fewer concessions than the alternative.
If you’re looking for a serviced office that’s designed for modern organizations and teams, book a tour of your local iQ Offices location today.
Kane Willmott is the co-founder and CEO of iQ Offices, the largest independent Canadian-owned co-working operator with offices in Ottawa, Toronto, Montreal and Vancouver. iQ Offices provides beautiful office spaces with safety, service, privacy and design at the forefront.
