How Do Businesses Acquire Office Space?

A company can acquire office space in a variety of ways.

Traditionally, the predominant option for a business seeking an office was to enter into a lease with a landlord.

The typical acquisition process involved engaging the services of an office agent or broker.

An office agent would typically work for an office space agency and have an intricate knowledge of a particular office space market and the players within it – be that the landlords, developers, other agents and of the incumbent occupiers within the geographical marketplace.

The office agent would act on behalf of the business and provide tenant representation services that would involve understanding the requirements of the business, searching the market for available offices, present these to the business and arrange office viewings.

Once a preferred option is found, the office agent would then negotiate the rent and other terms of the lease on behalf of the tenant, with the landlord and the landlord’s agent.

Once terms were agreed, a lease is drawn up through the legal representatives of both the landlord and the tenant.

An office agent would typically charge a percentage of the first years’ office rent, to the tenant, for their services.

This is the process typically used for any business seeking leased office space to rent.

If a business is seeking any form of flexible workspace including private serviced offices, managed office space or co-working space, it will, typically, engage the services of an office broker that will present to them flex space options matching their office search brief.

The office broker, typically, will also arrange viewings and act as an intermediary between the office provider/operator and the occupier when agreeing terms of occupation.

In most situations, the office broker will not charge a fee for this service as they will, typically, be paid a fee by the office space company on the completion of the deal.

There are nuances within the office space market created by the increased crossover between leasehold office space and flexible workspace options.

A traditional office agent may also work on behalf of an office space provider company, and a flexible office broker may also be able to provide leased office acquisition and tenant representation services, for instance.

It is critical that a business understands the pricing structures of various forms of office space and of the fee basis of the professionals acting on their behalf.