MySquareFeet Blog

Security Deposits Explained

Landlords require security deposits when they lease commercial real estate to tenants. The basic logic behind the security deposit is to protect the owner from physical damage to the property when a tenant leaves and/or to give the owner a financial cushion in the event of a monetary default under the lease.

In my experience, the "Security Deposit" clause in a lease is heavily negotiated and the inability to agree on the terms can sometimes cause the negotiations to break down. It is such a "deal killer" issue that it is a good idea to make sure that the monetary terms of the security deposit are laid out in the offer or the "Letter of Intent" along with other financial terms before lawyers are engaged to begin drafting leases. I think tenants and owners need to know if they can come to an agreement on this important business issue before they move on to other points and spend money and waste time on a transaction that is doomed from the start.

Office Suites, A Sweet Alternative

For Valentine's Day, I thought I would examine a "suite" alternative to leasing conventional office space for small businesses.  They go by many names, Office Suites, Executive Centers, Business Centers, Virtual Offices, or Executive Offices, and offer many different service packages and levels, from basic to gold plated opulence, but they all do one basic thing - provide an immediate plug-and-play office for your business.

I had never actually visited one of these services, so I called upon Tom Jamison of Connecticut Business Centers to give me a personal tour and behind the scenes look at his operation.  It was an interesting visit and I now think about the benefits these services can offer a small tenant in a different light.  To quote Tom, "If you tell me you want an office today, you can be in business with a T-1 connection here tomorrow." 

On Rentable Square Feet, Usable Square Feet and Measuring Office Space

In response to my post “How a bad lease can bankrupt your small business.” I got an email from Jewell in Orange County, CA. She asked:

“What do you do to verify the difference between rentable and usable square feet?  We have had many answers about how it was arrived at…the usable sq ft is 841 and the rentable sq ft is 1067.  I would love to have some tips on how to verify the difference.”

In my twenty plus years in commercial real estate, I have had as many explanations from owners for arriving at building measurements as there are buildings, it seems.  Miraculously, when some buildings were sold, they were one size with Owner A, and the next day, Owner B would re-measure the building and it was significantly larger!  We jokingly called this “rubber ruler” measurements.  However, there are some conventional standards for building measurement which will point you in the right direction.