10 Things You Must Check Before Signing an Office Lease

Found an office you love? Before you sign, stop. After hundreds of leases I've guided, I can tell you one thing with certainty: the expensive surprises are never in the price per sqm. They hide in the fine print. Here are the ten things I check for every client — before they take out a pen.

1. Management Fees — Your Second Rent

In office buildings, management fees typically range from ₪15 to ₪25 per sqm, and in newer towers can climb even higher. On a 150 sqm office that's another ₪2,500–₪3,500 per month — before you've paid a shekel in rent. Always ask to see exactly what's included: cleaning? security? AC maintenance? And what happens when management fees are updated.

2. Load Factor — How Many Sqm You're Actually Getting

The price is set per gross area, but you work in net area. The difference — the load factor — ranges from 8% in older buildings to 20% and more in towers with grand lobbies. A "150 sqm" office with an 18% load factor gives you roughly 123 sqm to work in. Always compare prices per net sqm.

3. AC Hours

Sounds trivial? Absolutely not. In many buildings the central AC operates Sunday–Thursday until 18:00 or 19:00. If your business works evenings, Fridays, or Saturdays — find out how much extra AC hours cost. I've seen tech companies paying thousands of shekels per month just for that.

4. Parking — How Many, Where, and at What Cost

The parking standard in office buildings is usually one space per 30–50 sqm. Check: how many spaces are tied to the property? Are they dedicated or "floating"? And how much does an additional employee space cost — in central Tel Aviv towers that can reach ₪700–₪1,000 per month per space.

5. Option Period and Its Terms

A good lease gives you certainty without locking you in. Pay attention not just to how many option years there are, but at what price: an option "at market rates" isn't really certainty. Better to have a defined mechanism — for example, linked to CPI plus a known fixed percentage.

6. Early Exit Clause

Businesses change. If there's any chance you'll grow (or shrink) before the lease ends, try to anchor an exit clause — for example, after 24 months with 3–4 months' notice, or the right to bring a substitute tenant. A landlord who refuses all flexibility is telling you something about themselves.

7. Who Pays for Fit-Out

Fitting out an office — walls, flooring, kitchenette, meeting rooms — easily costs ₪1,500–₪3,500 per sqm. In a strong tenant's market you can get significant landlord contribution or a rent-free period. This is one of the most worthwhile items to negotiate hard on.

8. Guarantees and Securities

A bank guarantee of 3–6 months' rent is the standard. A bank guarantee "locks" your credit line — check if the landlord will settle for a corporate guarantee plus a promissory note, or a cash deposit. The difference in cash flow can be significant for a young business.

9. Municipal Tax — Check the Classification

Office municipal tax varies dramatically between cities and between classifications within the same city — from ₪250 per sqm per year to ₪400 and more in major city centers. Ask for an actual municipal tax bill for the property, not an estimate. And confirm the registered classification matches your intended use.

10. Legal Status and Permits

Is there a permit for office use? Is the property properly registered? Businesses requiring an operating license (clinics, beauty salons, restaurants) must verify the property can even receive one. A lawyer acting for you — not the landlord — needs to review the contract. Always.

Looking for an office? At LS Real Estate we go through this entire list together with you, for every property. Talk to us — 055-2702800.