---
title: "How To Choose The Right Office Space For Your Business"
url: https://www.herehiltonhead.com/commercial-guide-office/
date: 2026-05-18T14:46:22+00:00
modified: 2026-05-18T14:46:22+00:00
author: ""
site: "HERE Hilton Head"
attribution: "HERE Hilton Head"
---

# How To Choose The Right Office Space For Your Business

*Source: [HERE Hilton Head](https://www.herehiltonhead.com/commercial-guide-office/) — May 18, 2026 by *

Commercial Real Estate · Evergreen Guide
  

# 10 Things to Know Before Signing a Downtown Office Lease

  

A commercial office lease is the second-largest expense most growing companies sign, after payroll. The terms negotiated on day one shape the next five to ten years of cost structure, flexibility, and exposure. These are the ten items every tenant should weigh before initialing the LOI.

  
    

## 1. Base Rent vs. Effective Rent

    

The headline rate per square foot rarely tells the real story. Free rent months, tenant improvement allowances, expansion options, and termination rights all roll into effective rent. A $30 per square foot office with six months of free rent and a $50 per square foot improvement allowance can underprice a $26 per square foot deal with nothing.

    

## 2. Usable vs. Rentable Square Feet

    

Landlords quote rentable square footage, which includes a load factor — the tenant's pro-rata share of lobbies, corridors, and restrooms. Load factors range from 12% to 22%. A 10,000 RSF office at a 20% load factor delivers only about 8,300 usable square feet. Compare deals on usable-foot economics, not rentable.

    

## 3. Operating Expense Pass-Throughs

    

Most office leases pass through operating expense increases above a base year. The fine print determines whether real estate taxes, insurance, utilities, repairs, and capital amortizations are recoverable. A "controllable expense" cap of 5% per year limits exposure. Without it, a single property tax reassessment can move occupancy cost meaningfully.

    

## 4. Tenant Improvement Allowance

    

TI allowances funded by the landlord typically range from $20 to $75 per square foot for office space. The deal point is whether unused TI converts to free rent and whether the tenant or landlord controls the construction. Tenant-controlled buildouts cost less and finish faster.

    

## 5. The Personal Guarantee Question

    

Landlords routinely ask for personal guarantees from owners of growing companies. A burn-down guarantee — full personal exposure year one, half in year two, zero by year three — is far better than a full-term guarantee. The worst structure is a "good guy" guarantee for the full term plus damages.

    

## 6. Expansion and Contraction Rights

    

Right of first offer on adjacent space lets a growing tenant capture additional square footage without paying premium asking rates. A contraction right that allows the tenant to give back 10% to 20% of the premises mid-term hedges against headcount surprises. Both are negotiable in soft markets, hard to get in tight ones.

    

## 7. Subletting and Assignment

    

Standard lease language gives the landlord broad consent rights over subleases. Push for "consent not to be unreasonably withheld," recapture rights limited to the entire premises, and the tenant's right to retain any profit on a sublease above base rent. These clauses matter most when the company exits or downsizes.

    

## 8. CAM and Janitorial Specifications

    

Common area maintenance scope and frequency vary widely. Compare janitorial cleaning frequency (nightly vs. three nights per week), HVAC after-hours rates, security staffing, and elevator response times before signing. These service-level details affect daily quality of life more than the headline rent number.

    

## 9. Building Operating Hours and Access

    

Standard office hours typically run 7 a.m. to 6 p.m. weekdays plus Saturday mornings. After-hours HVAC charges of $35 to $85 per hour per zone add up fast for companies running off-hours operations or weekend work. Negotiate a generous after-hours allowance into the base lease.

    

## 10. Termination, Holdover, and the End Game

    

Holdover rent at 150% to 200% of base rent kicks in if a tenant overstays. Surrender obligations — broom-clean, restore to base building condition, remove tenant improvements — can carry six-figure exit costs. Negotiate the surrender standard at lease signing, not at lease end.

    **Tenant takeaway.** An office lease negotiated with a tenant rep produces materially better economics than a deal walked into directly with the listing broker. Tenant brokers are paid by the landlord and align their interests with yours, not the building's.
  
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