As with almost anything in life, there are the expert opinions, and then there is what you decide to do. Ultimately, how long you decide to sign a lease for is, of course, up to you. This being said, there are many things to consider when you begin to figure out how long you’d like your lease term to be. Here’s what you should know.

Landlords like long leases. This is because they have mortgages that they’re continually refinancing. When they go to refinance their buildings, one of the key things that a lender looks for is stability in the tenant roster. The longer the leases in the building the better the terms a Landlord can generally garner. Based on this Landlords generally demand a 3 year minimum lease and often times are requesting a 5 to 7 year minimum. It’s rare to find a 1-or 2 year lease. Most leases range from 5 to 10 years.

The length of the lease you end up with can have a substantive impact on your business. We mention this because an office lease is generally the second largest fixed expense a business has after payroll. If you are a mature company and you don’t intend to grow employee wise significantly, sign a long term lease. If you anticipate a good deal of growth, try to negotiate expansion options or an out clause if you grow.

• As a tenant, you have to understand where you’re going and do some planning for the future. If you’re signing a 5 or a 10 year lease, you want to anticipate growth and to the greatest extent possible build in space options to protect you into the future.
• These are ultimately impossible questions to answer, but statistically speaking, 70% of all tenants that sign 10 year lease in any market end their lease below what the current market will bear.

There’s no one right answer, but you need to think about where your company is headed.