Offices guides
Office Space: Pricing Guide
What gives an office its price tag? What are the factors that make offices less or more expensive? Read this guide to discover how office spaces are priced.
Why office pricing is important
Whether you're a startup looking for your first office space, a small business seeking to expand, or a larger enterprise in need of additional locations, choosing the right office can be a critical decision for your success.
However, with so many options, features, and costs to consider, finding the ideal office that fits your budget and requirements can be a daunting task. Simply put: neglecting to consider pricing can kill your business before it even has a chance to take off.
That's why this guide will provide you with the essential information and insights you need to make an informed decision about your office space. We'll cover the key factors that influence office pricing, such as location, size, amenities, lease terms, and market trends. We’ll also cover the different types of offices available—from traditional leases to coworking spaces—and the pros and cons of each.
The basics of Office Pricing
Supply and Demand
Like all real estate, the basic economic rule of supply and demand is a fundamental element of office pricing. The less supply there is in a certain area, the higher the demand will be—and the more expensive it will be, too. It’s also intimately related to location, size, and other features of the office space itself.
Location
One of the biggest factors in officing pricing is location. Several offices could be in high demand considering how close they are to the city center, or if it’s in a very nice part of town. That means that, usually, office spaces in areas such as Mitte or Prenzlauer Berg will be expensive by default.
Proximity to public transport and the vibe of the area are also major important of office pricing. Offices around train stations, cafes, bars, and restaurants will also most likely be in highly-demanded areas where rents are usually higher.
Required size
If you’re looking for a 2000-person office, it’ll most likely be difficult to find the perfect space. Similarly, one-person offices are also in short supply. Size also affects supply and demand because each space is different.
Amenities
Let’s say you have very specific amenities in mind for your office—parking in Berlin, for example. There may be limited availability of offices that can meet all your needs, and thus, supply is limited.
Special rates
When a part of town has more availability, landlords or subletters may sometimes offer discounts to attract more tenants. That often applies to areas that are further away from the center—say, in suburban areas of a city.
Length of contract
If you’re not looking for a flex contract, longer commitments often come with significant price reductions, especially with larger offices. Landlords are interested in longer contracts because of the increased level of security they get from renting out their space for longer.
Immediate contract signing
Contracts signed on the day of the viewing will often be priced more attractively—though not always, of course. Some landlords or subletters are more willing to cut a deal because they want to lease their space as soon as possible.
Time of the month or year
In some regions, signing the contract near the end of the month or financial year will drive the price down. That’s because most companies give their notice on space or make key budgetary decisions for the year ahead during this period, and the market is often a bit more open.
Office space configuration and additional amenities
More specific space details and amenities around the space, such as office placement within a building, conference rooms, kitchen facilities, parking availability, and internet connectivity, can also influence the price of an office space.
Facing the street or the courtyard
Reduced natural light in an office space, particularly if it overlooks the courtyard, can often lower the office`s cost.
Position within the building
In Europe, corner offices are often extremely sought-after, which can significantly raise the price of office space. Top-floor offices, often with natural light, also can be more expensive.
Basement Level
Offices situated on lower floors or those with less access to natural light may sometimes come at a lower cost than other alternatives.
Surrounding views
Does the office overlook the park or the car park? Does it overlook the TV tower in Berlin? If it does, the office is most likely going to be priced a bit more expensive.
Décor
Older or dated styles may be sold for a lower price. Conversely, newer, more chic offerings will be priced a bit more expensively, too.
Premium suites
Some office providers offer premium offices with larger desks and bespoke furniture and décor, which ask for a higher rent.
Space usage and office pricing
How you choose to design and use your office space ultimately affects its price. Choosing more customized and fully-furnished options will naturally come at a higher cost, while less fitted-out options will be more affordable. Considering the following factors can help you make an informed decision:
High-density options
By accommodating more workstations within an office space, the cost per individual can be reduced; however, the overall room cost will remain constant.
Office modifications
Essential changes to the layout of your space, like installing a new kitchen or re-arranging some of the architecture, will raise the overall cost you pay.
Meeting rooms
Building more meeting rooms will also significantly raise the price of your office space, considering it’s your landlord that will have to build them.
Telecoms and IT
The price will vary dependent on the selected package. some clients have very basic telecoms and IT requirements whereas others require more complex, dedicated telecoms and IT support.
Types of contracts and office pricing
Whether you’re a private landlord or a fast-growing start-up, our platform makes it easy to find the perfect tenant for your space—with all the added benefits, and none of the hassle. Whether you’re a private landlord or a fast-growing start-up, our platform makes it easy to find the perfect tenant for your space.
Serviced office or plug-and-play contracts
Serviced office agreements offer a fully equipped office space with additional services such as receptionist, IT support, and maintenance included. These contracts are typically more flexible than traditional office leases and can be used by businesses of all sizes. They are often called Flex Contracts.
Traditional and exclusive Contracts
These contracts are more traditional and often require longer lease terms, typically one to five years or more. They are typically used by businesses that need a more permanent office space solution and can offer the security of a long-term lease.
Overall, it’s important to realize that the price you will pay for a flexible office varies greatly from region to region. We must first understand the industry difference between serviced offices and traditional classical rental and the market development over time for area and neighborhood.
Coworking Contracts
Coworking spaces offer a shared workspace where individuals and small businesses can rent a desk or private office within a larger shared office environment. These contracts typically offer a flexible, pay-as-you-go membership model that allows users to scale up or down as their needs change.
Frequently Asked Questions
What is the difference between an independent space and an open space?
An independent space is a separate, enclosed office or workspace that provides privacy and individuality to the company. On the other hand, an open space is a large shared area that has no partitions or barriers, where multiple people can work together in the same space. Open spaces are often used in coworking arrangements or in collaborative work environments, while independent spaces are more commonly found in traditional office setups.
How is rent calculated for office space?
Rent for office space is typically calculated on a per-square-meter basis. This means that the total square meters of the space is multiplied by the rental rate per square meter to determine the monthly or yearly rent. Additional fees may also be included, such as common area maintenance (CAM) fees or property taxes. Read our pricing guide for more information.
Can I customize An office space to fit my needs?
Many landlords will allow tenants to customize the office space to some extent, such as painting the walls or adding partitions. However, any modifications must typically be approved by the landlord and may require the tenant to return the space to its original condition at the end of the lease term. Read our architecture/design guide for more information!
What is the difference between leasing and renting commercial real estate?
Leasing involves a long-term contractual agreement between a landlord and tenant for a specified period, usually one year or more. Rental agreements are typically for a shorter duration, often month-to-month, and offer more flexibility. Leases offer more customization options but are usually more expensive, while rental agreements may have more standardized terms.
How do landlords typically calculate the square footage of an office space?
Landlords typically calculate the square meters of an office space by measuring the interior space of the unit, including walls and hallways. This measurement is known as the "rentable" square meters, and may include common areas such as lobbies, restrooms, and elevators. However, tenants are only charged rent based on the actual "usable" square meters of their individual unit.
Do you have another question?
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