How Much Does it Cost to Rent Office Space?
Are you an entrepreneur looking to start a business, and wondering how much office space will cost? Renting a commercial office is one of the biggest operating expenses of a company. Discover how much it cost to rent office space here.
According to the Small Business Administration’s Office of Advocacy, a small business has fewer than 500 employees.
If you own a small business, you’re in good company. Small businesses make up 99.9 percent of all firms in the United States. And many of these small businesses need to rent an office space to work.
But how much does it cost to rent office space? That depends on location, the size of the space, and the type of office you need to rent. Special facilities also affect monthly rates.
Keep reading to learn more about what to expect price-wise and how to find an office space for your needs.
Cost to Rent Office Space by Square Foot
The US average cost for office space by square foot is between $8-$23. The two starting factors to consider when pricing out an office space is how many employees you have and the location you need the office to be.
If you live in a larger city where space is at a premium, the cost to rent an office is often higher.
Once you decide on a location, you need to consider the number of your employees that need desk space. Many companies use square footage as a determiner for price.
Cost of Commercial Office Space by City
It should be no surprise that it’s more expensive to rent office space in some cities than others. The average cost for office rental rates per square foot varies depending on where you plan to set up.
The most expensive city to rent office space is in New York. In New York, the average price for office space per employee costs about $14,800 per year. The average for office space per month in New York is about $6.16 per sq ft.
San Francisco comes in a close second, with a monthly average cost of roughly $5.43 per square foot. That’s about $13,032 per year per employee.
Atlanta is the most affordable city with an average yearly cost to rent office space of $4,194 per employee per year.
Most major cities have office space rentals, but if you live in a smaller city or rural area you may need to travel farther.
How Much Square Footage Do You Need?
Will a single room with desk dividers work for you or will you need an office suite? The size of your office space depends largely on the number of employees you have and how much room you’ll need.
To find out how much you’ll pay per month, take the square footage you need and multiply it by rent per square foot. Using these numbers, you can also figure out your yearly costs. Keep in mind, extra services and amenities will impact this amount.
Depending on the company you use, some recommend 75 sq. ft. per employee. Other common numbers include 100 sq. ft or 200 square feet per employee.
Of course, larger working spaces are more comfortable but if you have a tight budget you may want to consider smaller spaces. Finding a balance between size and price can be tough, which is why you should compare quotes first.
How Much Does an Average Office Space Cost Per Person?
An office space per person can start around $300 per month and go up depending on location and the facilities included. The size of your office and the view also impact price.
An office suite can start at $3,000 and go up depending on location and the other factors mentioned.
Co-working spaces are the most cost-effective and can start as low as $99 per month, depending on the service.
While these are rates per person, an office space for lease in a larger building typically accommodates anywhere between 4 – 100 people or more.
Monthly vs Yearly Leases
Some landlords only offer one type of lease while others are more flexible.
Consider how much time you plan on using the office. If you only need a space for a few months, look for office space rental rates that price per month. But if you plan on using the space all year or longer, it’s best to sign a yearly lease for your business.
The type of lease you can get may depend on availability.
Office Space vs Co-Working Space
Many entrepreneurs and micro-businesses look for co-working spaces because they tend to be cheaper. Landlords of co-working spaces also tend to be more flexible with your lease.
Keep in mind that you share co-working spaces with other individuals, meaning you won’t have as much room to set up.
You also have to be conscious of the noise you make and consider the best way to hold meetings. Most co-working spaces have a conference room for rent, but what if it’s booked?
A dedicated office space is best for small to medium-sized businesses because you can grow into the space. You also won’t have to worry about noise or whether a meeting room is open for use. But ultimately, choosing between the two is up to you.
Extra facilities and amenities impact the price of your office rental cost. Not every building has facilities, but those that do tend to charge more for the added comfort and convenience.
Of course, all workspaces should have a reliable high-speed internet connection and a table or desk for workers to use. Think of added facilities as bonuses that you and your team may or may not need.
Here are some common features you may see:
- Private kitchen
- 24-hour access
- Lounge area
- Meeting rooms
- Video conferencing
- Vending machines
- Business lounge
- Janitorial services
These extra features may not be included in your lease rate, so talk to your landlord about pricing.
Some office spaces that have shared common areas like bathrooms or break rooms don’t have janitorial services. In this case, workers are responsible for cleaning up after themselves.
Consider your business needs before selecting an office space. You may be able to add some upgrades yourself (such as an in-office coffee service) as long as you clear it with your landlord.
How Much Does It Cost to Rent Office Space Near You? Get a Quote
So how much does it cost to rent office space? That depends on the location of your city, the square footage you’ll need, and the type of office you plan on leasing. As a general rule, office spaces with more features and privacy cost more and shared spaces cost less.
Calculate the space you’ll need per employee and then look for buildings that offer rentals in your desired area.
Ready to get some quotes? Check out our Buyer’s Guide to narrow down your choices and find the perfect match for your needs and budget.
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