For many businesses, large and small, office space is one of the most significant line items on the balance sheet. So, if you’ve found yourself wondering, “How much does it cost to rent an office space?” you’re not alone.
But here’s where things get tricky: there isn’t one clear answer.
Instead, there is a multitude of factors that influence the cost to rent an office space, from location to size, amenities, market demand, business proximity, and lease stipulations.
And in this article, we’ll explore each in detail to help you determine how much it costs to rent an office space for your business.
5 Factors That Influence the Cost to Rent Office Space
So, how much does it cost to rent an office space? The answer depends on X basic factors.
1. Location
First and foremost, where are you looking for an office? Are you located in a major hub city like New York or San Francisco, a smaller city, or a more suburban market?
As a rule of thumb, the bigger the city, the stronger the real estate market and, in turn, the higher the cost to rent an office space there.
The cost to rent an office space can also be influenced by location-specific factors, such as:
- Safety and neighborhood
- Access to major roadways and public transportation
- Proximity to local amenities such as restaurants and shops
If you want an office space at the heart of the action in a major city, the cost to rent an office space might be higher than if you’re looking for a spot that’s in a quieter area or smaller down.
2. Proximity to the Local Central Business District
As an extension of the previous point, the office’s proximity to the local central business district will significantly impact the cost to rent an office—and this is true whether you’re in a big city or a small town.
Having an office in (or close to) the central business district can be convenient for networking, connecting with clients, and attending meetings. It also offers a sense of prestige.
Because of this, offices in business districts tend to be a bit more expensive because of the convenience and prestigious image.
At Launch Workplaces, we offer flexible workspace options in a variety of markets, from urban to suburban, throughout Maryland, Cleveland, and Washington, DC.
3. Size
The cost to rent an office is calculated on a per-square-foot basis. So, it stands to reason that larger offices will be more expensive than smaller ones.
That being said, you may find economies of scale with bigger spaces, potentially reducing the cost to rent an office proportionately.
But square footage isn’t the only consideration. You might incur additional costs above and beyond your rental rate.
In a traditional office space, you’ll likely need to cover the cost of things like heating, cooling, cleaning, and maintenance. These factors can all influence the cost to rent an office space.
However, if you’re renting a flexible office space, these fees will likely be included in your monthly membership fee, meaning you won’t be facing variable costs each month—the cost to rent an office space will be all-inclusive.
4. Amenities
When you’re wondering, “How much does it cost to rent an office?” you should also consider what exactly you want in your office.
Amenities play a big part in influencing the cost to rent an office space.
Think of it this way: does your office need to have its own private meeting or conference room or kitchen?
If so, you can expect your costs to surge.
On the other hand, a bare-bones workspace with only the essentials will be a bit more budget-friendly.
If you want access to top-tier amenities but don’t want the price tag that comes with them, flexible office spaces like Launch Workplaces are a great option.
For example, you can get your own private office for yourself or your team and get access to amenities like:
- Parking
- Reception and on-site support
- Mail services
- Conference rooms
But since these amenities are communal, you’re not stuck paying to have them in your own workspace, even when you’re not using them.
5. Market Demand
Let’s look at basic economics and their impact on the cost to rent an office space.
If there’s a high level of demand for local office space and the stock is relatively low, you can expect your pricing to increase. In a traditional office lease, the landlord might even increase prices to meet “market rates.”
On the other hand, you can probably save a few bucks if you’re looking for office space in an area where demand is low, and availability is abundant—but there’s probably a reason why this is the case.
The problem is that when you’re looking for office space, you probably don’t have the luxury of trying to time the market.
So, you’ll have to make a decision based on many other factors in this equation.
How Much Does It Cost to Rent an Office Space?
While it’s tough to assign a number to the cost to rent an office space, there are a few things you can look at.
First and foremost, think about how much space you need for your team.
In general, we recommend 75 square feet per employee.
So, you can multiply the number of employees by 75 square feet to get a ballpark idea of what size office you need.
Next, you can look at the average price per square foot for office space in your area.
Some markets are significantly more expensive than others, including:
- Miami: $140 per square foot on average
- San Francisco: $204 per square foot on average
- Los Angeles: $108 per square foot on average
On the other hand, there are more modestly-priced office markets, such as:
- Washington, DC: $55 per square foot on average
- Baltimore: $32 per square foot on average
- Cleveland: $21 per square foot on average
So, when you’re wondering, “How much does it cost to rent an office space?” you can do a high-level calculation:
The average price per square foot in your area x the number of square feet you need = the cost to rent an office (estimated)
These averages can help you get a general idea of what you’ll be paying. But remember: these are just estimates—there are a ton of factors that will influence your true cost to rent an office space.
The Cost to Rent an Office Space: Traditional Office Space vs. Flexible Office Space
When you’re looking for a workspace, you generally have two options:
- Traditional office leases
- Flexible office spaces
The differences between these two models will influence your cost to rent an office space.
Traditional office spaces are a more significant financial investment than coworking spaces.
Why?
Because in a traditional office space, you’ll likely need to sign a multi-year lease, and you’ll probably be responsible for:
- Upgrading the space to meet your needs
- Furnishing it
- Setting up your tools, hardware, and IT infrastructure
- Running and managing the space
- Cleaning and maintaining it
- Handling any fixes or issues
While you won’t need to share any of the amenities, you also won’t be able to share any of the costs.
On the other hand, flexible office space can generally save you money in the long run. You may pay slightly more with your monthly membership, but you won’t be required to cover any of the costs listed above.
You’ll also be able to secure more flexible lease terms, meaning you won’t be locked into a three-to-five-year rate if your business needs change.
When it comes to calculating the cost to rent an office space, there’s no one-size-fits-all answer. It will vary depending on a variety of factors.
But by understanding these factors—as well as the options available to you—you’ll be better equipped to find the perfect office space at a price point that fits within your budget.
Want to learn more about flexible office space? Book a tour of your local Launch Workplaces location today.
