Wed, February 21, 2024

Turning empty office space into possible money

Editor’s Note: Don Lawrence and his company have been helping Augusta Business Daily to sub-lease unused offices at the building we lease at 930 Stevens Creek Road. He’s leased three executive suites for us and I thought if he can help ABD, perhaps he can help your company!

Have you ever walked around your CSRA office building and seen a lot of rooms with the lights off and no one there? Do you ever think that space is being wasted? Even after the pandemic, more employees are working from home or out in the field. With smart phones and laptop computers, many customer service and sales jobs can be done from anywhere these days. That guy you are talking to at Apple tech support might be sitting on a beach somewhere on the gulf telling you to turn your computer off and back on again!

If you are the business owner or manager, you hate to see your offices being wasted. Your mortgage payment or rent will be the same amount if those people come in or not. Employees may very often be more productive at home or in the field. Why force them to use the office space you supplied? You might want to just set up some cubical stations they can use when they stop by the office.

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To supplement your rent or mortgage expense, you may consider leasing or sub-leasing individual offices or sections of your building to other companies. There are a lot of small start-up companies that just need one office, or even only a business address. You could even advertise your extra offices as executive suites that come with scheduled use of the conference room and a reception area.

Of course, the most important part of leasing or sub-leasing is adequately screening the prospective tenants that will be sharing your building. You need to make sure the businesses are compatible and will not disrupt your employees. It’s best to lease to tenants who don’t have a constant stream of visitors. It’s also a good idea to have security cameras at all building entrances and at the main entrance lobby.

Sub-leased space is usually leased on a full-service basis. Meaning, the landlord pays all expenses, including utilities and common area cleaning. The only tenant expenses are cleaning and maintenance inside their suite. A very good rental rate can be achieved from these deals because the tenant does not have to worry about extra expenses, and they have access to common hallways, restrooms, conference rooms and the reception area.

Executive office suites typically come with shared reception areas and conference rooms. Photo: Courtesy Pinterest

If you are sub-leasing your commercial space, it usually requires landlord approval. Landlords are typically ok with sub-leasing, but they will confirm you are still responsible for the whole rent payment, and you will repair any damage to the building.

By now you are probably thinking, “I have no idea what an appropriate rent would be for the space I want to lease”. My recommendation is to determine what you are paying per square foot for rent and then add in all of your building expenses. Once you know all of your rent and expenses are covered, add a premium of roughly 20% to 25% for administration and management of their lease. Another way to pinpoint rent is by comparison. You can look at current commercial lease listings on the following websites – CREXi.com, Loopnet.com, or OfficeSpace.com. When doing so, be sure to compare apples to apples. If you are offering full-service rent, you don’t want to compare it to a triple net rate. I strongly recommend you consult with a commercial leasing agent to set the right number. You don’t want to lose money in the endeavor.

Feel free to contact us if you have any questions. You can also visit our website at www.DCLawrence.net.

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