As a small business owner, what are my office space options and what is the best solution for me? 

As former owners of traditional office space, we at Yeager Texas Office Suites have a unique perspective into the common benefits and challenges experienced by businesses of all sizes when exploring office space options. In this lesson, we seek to to outline and describe your options, assuming you aren’t interested in officing in the park like this guy:


Everything Coworking Facebook group, Boris Reitman

If this is the case, then your office space options fall into one of six categories:

OPTION 1: Traditional Commercial Lease

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This is how things have been done in the office world for decades. The landlord hires a leasing agent to list their property for lease. You will find it on the sign in front of the property and call the broker to ask about available options. Many landlords now also have their spaces listed on CoStar and LoopNet, online databases where building information is uploaded for brokers to access. You can also hire a broker or “tenant rep” that represents you to help you find the right space. Think of them as a “buyer’s broker” when you are buying a house. It is rare, at least in the DFW metroplex, that tenants are directly leasing from landlords without being represented by a tenant rep.

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Typically, in this world, you will have to customize the space to fit your needs. The chances are low of finding your exact requirement in the desired location as is. Design is often required (typically called space planning or a “test fit”) in the early stages so that the landlord can determine the cost to meet your requirements. Once the design is approved, the landlord will give you the price and will typically (if you have strong enough credit) offer some allowance to help you cover the costs to finish out your space. Since the landlord needs to recoup their costs of customizing your space (and paying your broker and their broker), they will typically need a minimum of three-to-five years on a lease term. Leases are fully negotiable, however, landlords don’t often bend their standard lease much for smaller tenants who require less than 5,000 square feet or so, depending on the building and landlord.

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For many users, this is the epitome of a big boy/big girl office. You have some degree of permanence, and you know what your rent will be (at least base rent) for the next five, seven or 10 years. You can customize the space to meet your needs and brand it the way you want to best fit your image and culture. Many buildings, especially larger ones, are now offering amenities such as gyms, conference rooms and event space that is on par with upscale apartment complexes.

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While you can negotiate some flexibility (and, in some cases, termination options for longer term leases with an associated penalty), you are most often locked into your lease contract for the entire length of the lease term. If you need to expand or contract, you are really at the mercy of your landlord and subject to the availability of other space within the building. Often, as a small tenant, your landlord will require a personal guaranty and have the right to relocate you within the building if a larger tenant comes along who wants your space. Rarely will a landlord’s tenant improvement allowance fully cover the cost of your dream space, meaning you will need to come out of pocket to get the space up to your standard. In newer or better-located buildings especially, you might be responsible for 100% of your share of the operating expenses over and above your base rent and you will need to set up your security, IT, etc. within the space for yourself.

OPTION 2: Spec Suite

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This option is essentially the same as the “traditional commercial lease,” though you will be looking for terms such as spec suite, pre-finished suite or ready-to-lease space. These spaces are typically larger blocks or floors of unleased space that the landlord has decided to finish out without a specific tenant in mind. Finished space shows considerably better than second-generation or white-box space and can help landlords increase their leasing velocity.

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Although the space is typically “pre-finished,” you may need to add or subtract an office or take in some space from an adjacent suite. Some landlords will offer a little flexibility for “tweaking” their finished space to meet your needs, so long as the tweaking does not cost too much. Because the landlord’s costs are sunk into the space already and they typically can build a block of specs for less money than a custom project, they may be willing to accept a shorter term on a spec suite (say, three years).

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If you are in a hurry, but you like many of the benefits of traditional office space, this can be a good option. Also, if you don’t want to go through or don’t have time for an interior design process where you have to make lots of choices, this can be for you. Or, if you have a hard time visualizing a 2D plan in 3D, this is a good option, as the space is already built.

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The cons are similar to those of traditional office space: you are locked into a contract with limited flexibility and limited bargaining power. You can, however, mitigate some of the risks with the possibility of a shorter term than a traditional commercial lease.

OPTION 3: Sublease

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“I know someone with extra space” often signals a sublease opportunity. Subleases can be found through brokers, however, because they can be more complicated with lower commissions than new leases, brokers may not seek them out. Sublease opportunities often derive from people in your network – other business owners who find themselves with too much space who want to lease part or all of a space for which they still have a remaining commitment.

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Sublease agreements vary greatly, from what is essentially a lease within a lease (and often must be consented to by the landlord) to “handshake” deals between friends. Whichever the case, especially for smaller spaces, you are essentially taking the space as it is.

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Especially on the less formal end of the agreement spectrum, this can be an “easy-in and easy-out” scenario similar to finding a roommate. Oftentimes the spaces will already be furnished and, if you are lucky, there may be some shared services such as reception, kitchen, and copying services. You will not have to worry about any buildout or provision of utilities or internet as it will most likely all be in place.

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In the “handshake” deal scenario, you are at risk if you do not have a direct agreement with the landlord. If the landlord is not aware you are occupying the space, you are in violation of the lease with the landlord. Even if you do have an agreement with the landlord, sharing space with another company may not present the ideal image for your business. Meetings or interviews at the office can be awkward and there may be battles for resources such as conference room time or coffee. There may also be some risk to the stability of the arrangement, especially if the friend or company you are leasing from is having financial difficulties. If they default on their lease, it is unlikely the landlord will let you stick around out of the goodness of their heart, unless you have a separate agreement. In addition, if you are on friendly terms with the person you are leasing from, it could be challenging to settle common office disputes.

OPTION 4: Flexible Office/Private Office Suite

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Unlike the process usually employed with traditional office space, very few small businesses use brokers to find an office space that is flexible. This process is much more consumer-driven as many find their space through online channels such as Google, Bing, or Yelp. Many users locate space simply by driving by it, through word-of-mouth referrals or via friends who are already officing in a space.

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Typically, flexible office space operators have a set form lease (similar to the “fill-in-the-blank” contracts that realtors use on houses) that is not heavily negotiated. You will typically inquire via phone, email or chat about space availability, but you won’t typically see the prices of the available suites posted online. If you talk to a community manager, you can obtain suite availability and pricing, along with information about optional amenities and any associated cost. Most flexible office spaces offer mail options, conference rooms, internet access and a small kitchen facility.

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You are buying into a true “plug-and-play” environment, with very little time or investment needed for setup, perhaps other than furniture and decor within your private office. The environment is professional, and you save money by sharing amenities such as reception, conference rooms, kitchens and bathrooms. Terms vary, but the contract can be far shorter (such as month-to-month) and the credit proving process much simpler. It can be relatively easy to add more space or reduce space quickly as your business needs fluctuate.  Interactions between fellow members who may likely be small business owners can provide you with necessary peer support as you seek success in a competitive market. 

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While it is often seen as a benefit, some users find the inability to customize your space or physically alter the layout of your space unattractive. Companies of a certain size (perhaps needing seven or more private suites) may find it inconvenient to have their office spread out within a larger project or they may have more specialized space needs that cannot be met. While there are a wide variety of options and many operators have all-inclusive packages, there are some that tend to “nickel-and-dime” their membership with extra charges.

OPTION 5: Coworking

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Similar to flexible office space, coworking solutions are often found using online search engines such as Google or through referrals or drive-by or walk-through interest.

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Coworking operators also have a set form lease that does not require much negotiation. Many coworking packaging options and pricing are available online, but you can often also inquire via phone, email or chat to learn more about the community. There are many different packages out there, but they usually range from an unreserved place in a common area to a reserved desk or small office. As with flexible office, coworking spaces usually offer mail options, conference rooms, internet access and a small kitchen facility.

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Coworking provides a separate space from home or a coffee shop for you to work that is most often professional.  Shared amenities such as conference rooms, bathrooms and kitchens can save money. Terms vary, but they are usually much shorter (month-to-month) and do not require a deep dive into your credit. Some users also enjoy and value the camaraderie of working in a space along with what can often be similarly positioned peers.

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Being in a shared coworking space presents a very different business image that what might be perceived in a suite in a traditional office building or even a flexible office suite. Sharing space open space with others can be challenging as business etiquette varies greatly among industry, age and culture. Privacy can be hard to find and often requires advance scheduling. While amenities may be abundant (lightning-fast internet, breakfast on-site or accessible coffee machines), be sure to pay attention to the cost structure of your coworking package. Users have been surprised by the total of their bill at the end of the month due to incidental fees.

OPTION 6: Home Office

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Good news – you have already found it and are paying for the space!

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Wake up, make coffee, sit down and open your computer.

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Depending on your current set up, the initial cost should be minimal, possibly other than outfitting a room with a desk, a few monitor screens and a printer. You have all the flexibility that comes with officing where you live: immediate access to full bathroom and shower, the ability to step out for exercise easily or the comfort of a dog laying on your feet. There is no commute and you are likely to have healthier food options and save money eating lunch at home with less temptation to dine out with colleagues. Coworkers aren’t able to pop by your office and interrupt your work and you can sport the sweatpants and blazer look and no one will ever know.

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Much has been written about the cons of working from home. From barking dogs and crying toddlers to the nagging pile of dirty laundry or dishes, working from home can be full of distractions. Anyone that has worked from home successfully has had to develop strategies of their own to mitigate these problems. Less tangible negatives include missing out on unplanned social time with coworkers or not having the benefit of reading facial and body expressions in communication. Many professionals simply are more productive and focused when working from an environment that is separate from where you live. From a leadership perspective, building company culture or collaborating at a high level can also be much more challenging with team members scattered working from home. There is also the potential interpretation from customers or clients that a business is less legitimate without a dedicated office and address.

Please reach out to us at Yeager Texas Office Suites should you find yourself in need of flexible office/private office suites or coworking (Options 4 and 5). Each of our locations provides our members with these office space options.