Before You Sign: The Top 3 Hidden Costs of Office Subleases

US office subleases hit a record high in Q2 2023. And while the available space has shrunk since then, the market is still awash with subleases that offer loads of square footage for a low monthly rent.

These opportunities look attractive on paper. But the real cost is rather steep. And in a still-tight economy, no professional wants to be unnecessarily locked into a multiyear contract where the costs keep piling up.

When you know what to expect, though, you can make an informed decision about the right office space for your needs. Here, we’ll walk you through the top three hidden costs to watch out for before considering an office sublease.

1. Utilities and Maintenance

Many commercial tenants pay for their own utilities on top of their monthly lease obligation. When you sign a sublease, these utility bills will potentially get passed down to you – and the costs can be high.

In practice, this typically means you’ll have to cover…

• Basic utilities (like water, gas, and electric)

• Business necessities (like high-speed internet or print and copy services)

• Common area maintenance (CAM) expenses (which go toward everything from janitorial services to parking lot maintenance)

Depending on the terms of your agreement, you may need to create your own account for each utility – or go through the hassle of paying the sublessor for each service that remains in their name.

Building maintenance often comes with a similar hassle. Many landlords only communicate with the primary tenant about maintenance issues. So if your office’s HVAC system breaks down in the middle of a heat wave, you’ll likely need to ask the sublessor to ask the landlord to send someone out.

A telephone relay like that creates an awful lot of headaches during an emergency. And to make matters worse, there’s a chance your sense of urgency might get lost in the chain of communication. The impact: repairs completed later than they should be.

2. Concierge Services and Building Amenities

Office experiences matter – both to your clients and to your employees. And for clients in particular, a concierge can make or break their first impression of your space. When clients visit your building in person, they expect someone to greet them, walk them to your office, and answer any questions they have along the way.

But office subleases don’t come with a concierge. When your sublessor leaves their office space, the front desk staff goes with them. That’s not just frustrating for your clients; without a concierge available, it’ll likely be your responsibility to handle…

• Mail reception and shipping

• Greeting guests

• Food and package deliveries

• Document notarization

• Witnessing documents

Hiring your own concierge will make things easier, of course. But you’ll still have to foot the bill, amounting to yet another payroll expense.

As for your employees, solid building amenities can help you drum up excitement about a new office space. But that’s only if the landlord lets you use them. There’s a chance they may not extend access to sublessors – which negatively impacts you and your team.

In a best-case scenario, maybe this just means you can’t use the building gym for your 7 AM workout. But perhaps you’re also locked out of the bike storage room. Or can’t reserve the amenity floor or event space for an after-work function.

Not every amenity is a must-have, but a complete and easy-access package is key to keeping your team happy in the office. By signing a commercial sublease, you could be inadvertently hampering your team’s workplace satisfaction.

3. Nonrenewal or Rent Increases

Even the best of commercial subleases come with a catch: there’s no guarantee you’ll get the terms you initially secured when you’re up for renewal. And that’s if you’re able to renew at all.

Most office subleases last for at least a couple of years, which leaves a lot of time for the market to change direction. So if there’s a growing waitlist of eager tenants, landlords will gladly squeeze out more dollars per square foot – a problem if you’re expecting another five years of cheap rent.

That leaves you with a choice: renew your lease at an inflated rate or go back on the office space hunt. In other words, a seemingly secure and affordable sublease could leave you on shaky ground in a few years’ time.

Proworking Has Zero Hidden Costs

In many cases, office subleases are simply more expensive – and frustrating – than they’re worth. What’s more, you can’t flex the office space you use as your team evolves – the opposite of what businesses need in this economy.

But that doesn’t mean you’re out of options. With a proworking space, you can confidently sign a lease that includes attractive benefits with zero hidden costs.

That’s why every Firmspace location includes utilities, on-site maintenance, upscale amenities, and concierge services. Plus, you can scale your office space up or down depending on your needs. No hidden restrictions, fees, or headaches.

Want to learn more about the proworking advantage? Book a tour at any Firmspace location and see the impact for yourself.