In the dynamic business world, co-working spaces have emerged as a popular choice for startups, freelancers, and even well-established companies seeking flexibility and cost efficiency. However, tenants must be mindful of certain aspects when negotiating co-working space leases to ensure they maximise their investment. Here are some things to watch out for when negotiating co-working spaces as a tenant.

Understanding your business needs

Before starting negotiations, it's crucial to understand your business needs clearly. How much space do you need? What facilities are essential for your team's productivity? Are you seeking a short-term lease or a long-term one? What's your budget? Having clear answers to these questions will guide you during negotiations and help you avoid paying for unnecessary amenities or agreeing to unfavourable lease terms.

Cost considerations

Co-working spaces typically operate on a membership model, which may include monthly, quarterly, or annual fees. Be sure to scrutinise the cost structure carefully. It's not just the basic rent that you need to consider, but also additional costs like service charges, charges for extra services (printing, private meeting rooms), and possible increases in membership fees over time.

Flexibility of lease terms

One of the main advantages of co-working spaces is their flexibility, which can be a boon for businesses experiencing rapid growth or dealing with uncertainty. However, flexibility should not be taken for granted. Understand the lease's length, the notice period required for termination, and the terms for modifying your membership, such as scaling up or down the amount of space you rent.

Space accessibility

Co-working spaces often promote 24/7 accessibility as a key selling point. But it's important to confirm the specifics of this access. Are there any restrictions or extra costs associated with after-hours access? Also, consider the physical accessibility of the space – is it close to public transportation, and does it offer parking facilities?

Data security and privacy

Co-working spaces, by their nature, involve sharing spaces with other businesses, which can raise concerns about data security and privacy. Make sure you understand what measures the provider has in place to ensure data security. Also, consider the layout of the workspace. If your work involves sensitive information, you might require private spaces or dedicated desks instead of hot desks.

Amenities and services

While the allure of a modern, well-equipped workspace can be strong, tenants must assess which amenities they truly need. High-speed internet, comfortable workspace, meeting rooms, and basic office equipment are often essential. However, extras like free coffee, event spaces, or gym memberships, while attractive, may not justify a significantly higher membership fee.

Community and network opportunities

A key value proposition of co-working spaces is the opportunity to network with a diverse range of professionals. However, it's crucial to consider whether the existing community aligns with your business's culture and aspirations. Attend a tour or a trial day to get a sense of the community before committing.

Advice

Finally, while co-working agreements might seem straightforward, it can be valuable to seek the advice of a tenant advisor, particularly if you're committing to a long-term lease or a significant amount of space. An independent advisor can help you understand all terms and conditions and ensure your interests are protected. One should approach a co-working lease with the same due diligence as any commercial lease.

About LPC & the LPC subscription service

LPC provides office, retail, and industrial occupiers with advice and services that benefit their accommodation arrangements and respective businesses. With no ties to investment property owners or leasing agents, we only represent occupiers, and our advice is free from any conflict of interest that would disadvantage an occupier. Our purpose is to help commercial occupiers optimise their accommodation and tenancy arrangements. You will find the LPC subscription service helpful when identifying key terms for renegotiation and getting to the lease you deserve.