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Know Your Financials Before You Start Touring New Office Space

Before you tour a single office, know your numbers — growth projections, all-in costs, cash on hand, and financial history. What landlords actually ask for.

By TenantBase

Know Your Financials Before Touring Office Space — Blog Header
Before you tour a single office, know your numbers — growth projections, all-in costs, cash on hand, and financial history landlords will ask for.

Choosing new office space is a decision that can meaningfully affect your company's culture and longevity — which is exactly why it pays to prepare before you start touring. We've covered how to prepare for the tours themselves; this guide covers the financial side, so you search with a realistic, well-informed sense of what you can actually afford.

Quick Answer

Before touring, project your growth 2–3 years out, budget the full cost of occupancy (not just rent), confirm you have enough cash on hand for first month's rent plus a security deposit, and have your P&L, tax returns, and balance sheet ready. Landlords are evaluating your financial stability just as much as you're evaluating their building.

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Plan for Today and Tomorrow

When evaluating new space, consider your organization's current and future needs to determine the most suitable lease term. Look carefully at what you can afford today and how long that affordability will realistically hold. That means projecting growth in both revenue and headcount two to three years out — the space that fits perfectly now can become a mismatch well before your lease term ends if you haven't planned for where the business is heading.

Pay Attention to the Finer Points

Moving into new office space involves more than the base lease rate. A number of other cost factors need to be built into your projected budget to avoid unforeseen expenses catching you off guard after you've already committed.

  • Parking — monthly fees per space, if not included
  • Furniture and buildout costs beyond any TI allowance
  • Internet, phone, and IT setup
  • CAM charges, utilities, and other operating expense pass-throughs

Since every property structures these differently, prepare a specific set of questions for each tour so you can make a fully informed comparison rather than discovering line items after you've already picked a favorite.

Cash Is King

This might sound obvious, but cash on hand is frequently underestimated — and it's a common way organizations end up feeling cash-strapped immediately after a move.

Budget for, at minimum
  • First month's rent
  • Security deposit
  • A reserve for move-related costs — furniture, IT setup, and any buildout not covered by the landlord's TI allowance

Make sure you have enough left over after these to handle unplanned expenses without draining your operating accounts down to the wire.

Financial History Matters

Moving into new space is a real exposure for the landlord too — they're taking on a new source of risk that could affect their own building's performance. Because of that, you'll need to demonstrate a financial history showing you can absorb the cost of the lease and its related expenses without threatening your cash flow or overall stability.

Prepare and review your P&L, tax returns, and balance sheet ahead of time so you can provide the assurances a landlord will expect and demonstrate your ability to perform under the lease.

Craft a Plan That Works for Your Business

Very little in commercial real estate is truly non-negotiable — but the financial terms of a lease come closest. You'll need to provide some reasonable level of assurance that you can pay rent consistently and on time.

Once you've organized the items covered here, work with a tenant rep to understand what constraints or opportunities your financial picture creates for your search. For example, if your business has a short or thin financial track record — common among startups — you can often work around it with an increased security deposit or a personal guaranty on the lease, where a business owner personally commits to covering lease obligations if the company can't.

Nothing here is fixed in stone, but working with your advisor from the beginning helps you identify options that are actually realistic for where your business stands today.

Search With a Realistic Budget in Hand

A local tenant rep can help you understand what your financials support in your market before you tour a single property — at no direct cost to you in most U.S. markets.

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Frequently Asked Questions

What financial documents do landlords typically require from tenants?
Most landlords request a profit and loss statement, recent tax returns, and a balance sheet to confirm the tenant can absorb rent and related costs without threatening cash flow. Requirements scale with lease size and term length.
How much cash should I have on hand before signing a lease?
At minimum, enough to cover the first month's rent and any required security deposit, plus a reserve for move-related costs like furniture, IT setup, and buildout items not covered by a tenant improvement allowance. Running these numbers close to zero is a common and avoidable mistake.
What is a personal guaranty and when is one required?
A personal guaranty is a commitment from a business owner to personally cover lease obligations if the company cannot. Landlords often request one from startups or businesses with limited financial history, sometimes as an alternative to a larger security deposit.
How far ahead should I project growth before touring office space?
Most tenants should project revenue and headcount growth two to three years out, since that typically aligns with common lease term lengths. A space that fits today but not in two years can force an expensive early relocation or a difficult renegotiation.
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