Renting unused office space: a guide for landlords

Jul 23, 2024

Renting out unused office space has become a priority for many companies looking to monetize their vacant spaces. Subleasing office space is a smart strategy for generating additional revenue while fostering professional synergies. In this comprehensive guide, we’ll walk you through the process of renting out unused office space step by step, helping you maximize your revenue and minimize risks.

Table of Contents

Why rent out your unused office space?

The trend of renting out unused office space has gained significant momentum since the widespread adoption of remote work. Many companies find themselves with workspaces that are partially or completely vacant, representing a significant fixed cost without any corresponding productivity. Rather than bearing this burden, why not turn this idle space into a source of revenue?

Generate significant additional revenue

Monetizing your unused office space can be a significant source of revenue. In the Île-de-France region, potential earnings range from €200 to €900 (excluding tax) per month per workstation. These figures vary based on several factors: geographic location, the quality of services offered, available amenities, and local competitive pressure. Coworkea systematically conducts market research before each project to ensure you achieve optimal pricing.

Create unexpected professional synergies

Beyond the purely financial aspect, renting out your unused office space can open up unexpected opportunities. It is not uncommon for strategic partnerships to form between host companies and their subtenants. The cost of rent sometimes becomes negligible compared to the value of the synergies created: sharing of expertise, mutual referrals, and the development of new collaborative projects. Physical proximity naturally fosters the emergence of these opportunities.

Reduce your carbon footprint and improve your CSR

The environmental aspect is often underestimated, yet it is a major factor. It is estimated that, on average, 40% of a company’s carbon footprint is linked to its real estate portfolio. By sharing common spaces and eliminating vacant rental units, you actively contribute to reducing carbon emissions. This approach avoids the construction of new buildings and optimizes the use of the existing real estate portfolio. A compelling argument for your CSR communications and your GHG emissions report.

Reduce your fixed costs

For many companies, rent is the second or third largest expense after salaries. Subletting your unused office space automatically reduces the net cost of your commercial real estate. In some cases, the sublease fully covers the rent under the main lease, allowing the company to enjoy high-quality space at virtually no cost.

How much can renting out unused office space bring in?

The profitability of a venture to lease out unused office space depends on many factors. Here is a realistic estimate based on France’s major geographic regions:

Central Paris (inner city districts): between €500 and €900 per month per position (excluding tax)
Paris suburbs and inner suburbs: between €300 and €600 (excluding tax) per month per position
Greater Paris area: between €200 and €400 (excluding tax) per month per position
Major regional cities (Lyon, Bordeaux, Marseille, etc.): between €150 and €400 (excluding tax) per month per workstation
Medium-sized cities: between €100 and €250 (excluding tax) per month per workstation

These price ranges are approximate and should be refined through local market research. The included services (high-speed internet, cleaning, reception, shared meeting room, fully equipped kitchen) can increase the rental price by 30 to 50 percent. This is why Coworkea conducts a detailed analysis of your listing before it goes live.

Legal Framework for Office Subleasing

Before leasing out your unused office space, it is essential to clarify the legal framework that applies to your situation. There are two possible scenarios:

If you are a tenant: obtain the landlord’s consent

As a tenant under a commercial lease, subletting generally requires the prior written consent of your landlord. It is therefore essential to review the terms of your lease and obtain your landlord’s authorization before proceeding. Failing to do so may result in the termination of your lease. To learn more about commercial lease regulations, you can consult the resources available on Service-Public.fr.

Service Agreement vs. Commercial Lease

A legally advantageous alternative is to use a service agreement rather than a commercial lease. This type of agreement offers you greater flexibility: it avoids certain constraints of commercial real estate law (minimum term, right to automatic renewal, etc.) while protecting your interests. Coworkea uses proven contracts, reviewed by attorneys specializing in business law. To learn more about the benefits of this type of contract, check out our article on office subleasing and choosing the right contract.

If you are a homeowner

If you own your premises, you have complete freedom to rent out your unused office space. You are free to choose the type of lease and the rental terms. However, be sure to consult a professional to draft solid, legally sound contracts.

8 Steps to Renting Out Your Unused Office Space

Here is the complete process for successfully leasing unused office space, from the initial assessment to signing the lease.

Step 1: Assess the available space

Start by clearly identifying the spaces that can be rented out without disrupting your daily operations. Make sure these spaces are in good condition and ready to welcome new tenants. Here are a few practical tips: prioritize private offices over open-plan offices (which are easier to rent out and bill for), and reserve windowless rooms for meeting rooms rather than permanent workstations.

Step 2: Conduct market research

Before setting your price, analyze what competitors are offering in your area. Check out platforms specializing in office and coworking rentals, compare the services offered, and determine your market positioning. This analysis will help you set a competitive price while maximizing your return on investment.

Step 3: Review the legal framework

Carefully review your lease or property deeds. If you are a tenant, contact your landlord to obtain their consent. Choose the type of agreement that best suits your situation (service agreement or short-term lease). Feel free to consult a specialized attorney or seek assistance from Coworkea.

Step 4: Prepare and enhance your spaces

A clean, bright, and well-appointed space rents faster and commands a higher rent. Invest in a deep cleaning, a fresh coat of paint if needed, and make sure all equipment is in good working order (internet, phone service, air conditioning). Also consider adding soundproof phone booths, which are the feature most requested by subtenants to enable private calls and video conferences.

Step 5: Post an appealing ad

The quality of your listing is key. Take professional, well-lit, and well-composed photos that show your office space in its best light. Write an accurate and honest description, including the square footage, amenities, services, and access details. Post your listing on specialized platforms and work with professionals like Coworkea to maximize your visibility.

Step 6: Carefully screen your tenants

Once your listing is published, you’ll receive inquiries from interested companies. Carefully evaluate each candidate: industry, team size, desired lease term, and financial stability. Beyond these objective criteria, prioritize companies you’ll enjoy working with: the quality of your day-to-day relationship is essential for a harmonious and long-lasting partnership.

Step 7: Schedule visits and negotiate the terms

Be transparent during viewings: highlight the positives as well as any potential limitations of your space. This helps avoid misunderstandings and unnecessary viewings. Be prepared to negotiate the terms: lease term, included services, cancellation policies, and security deposit. A mutually agreeable arrangement is the foundation of a long-lasting tenancy.

Step 8: Sign the contract and secure the payment

Formalize the agreement by signing a comprehensive contract that includes all rental terms, the responsibilities of each party, and payment terms. Be sure to collect a security deposit (typically three months’ rent) to protect yourself against unpaid rent or property damage. And above all: send invoices regularly and keep close track of payments.

How should you set the rental price for your office space?

Pricing is a crucial step in renting out unused office space under the best possible terms. Setting the price too high will prolong the vacancy period; setting it too low will put you at a financial disadvantage. Here are the key factors to consider:

Factors that influence rental prices

Location: the neighborhood, proximity to public transportation, the prestige of the address
Floor space and layout: private offices vs. open-plan offices, space per workstation, natural light
Included services: high-speed internet, housekeeping, reception, parking, meeting room
Contract length: A long-term contract may justify a slightly lower rate
The overall condition of the premises: the building’s quality, modern amenities, and interior design
Local competition: number of similar offerings in the geographic area

In practice, we recommend setting a price slightly above market value to leave room for negotiation. Subtenants often expect to receive a small discount, especially for long-term leases.

How do you choose the right tenant for your office space?

Choosing the right tenant is perhaps the most important step in successfully leasing your unused office space. The wrong tenant can turn a great opportunity into a real nightmare. Here’s how to find the ideal tenant.

Objective selection criteria

Financial stability: Request financial statements for the past two years, a recent Kbis extract, and references
Suitable business sector: Avoid noisy activities, those that generate heavy traffic, or those that are incompatible with your business
Team size: Make sure the number of positions requested matches the available space
Desired rental period: A minimum commitment of 6 to 12 months is generally preferred

Criteria for relationship compatibility

Beyond financial criteria, personal and cultural compatibility is key. You’ll be sharing your daily lives, common spaces, and sometimes even casual conversations. Prioritize companies whose values and culture align with your own. Complementary industries can generate natural synergies that are highly beneficial to both parties.

Practical Tips for Successfully Leasing Your Office Space

Beyond the formal steps, here are some practical tips based on our experience to help you successfully and sustainably lease out your unused office space:

Commit to complete transparency

Provide complete and honest information about the office space: its strengths as well as its limitations. It’s better to mention the downsides over the phone rather than waste time on viewings that won’t lead to anything. Transparency is the foundation of any lasting relationship of trust with your tenants.

Maintain and continuously improve your spaces

Just as you invest in your work tools, you should invest in your office space. A clean, well-maintained, and regularly updated space attracts better tenants and justifies higher rents. Adding small improvements—such as potted plants, LED lighting, and ergonomic furniture—can make a big difference in how visitors perceive the space.

Maintain open and responsive communication

Once your tenants have moved in, maintain regular and responsive communication. Address any requests or complaints promptly. A satisfied tenant stays longer and may recommend your company to others for potential additional spaces. The quality of the tenant relationship is a key factor in reducing your vacancy rate.

Adapt to your tenants' changing needs

Be flexible and ready to adapt your offering to meet your tenants’ needs. A growing business may need additional workstations; another may want to scale back temporarily. This flexibility is invaluable and sets your offering apart from the rigid solutions of the traditional market.

Mistakes to Avoid When Subletting

To ensure the success of your project to lease out unused office space, here are the main mistakes to avoid:

Subletting without the landlord's consent: a serious breach that could lead to the termination of your lease
Neglecting to draft a contract: a vague or incomplete contract can lead to costly disputes
Setting a price without conducting market research: the risk of overpricing or underpricing your offer
Not collecting a security deposit: depriving yourself of essential protection in the event of unpaid rent or property damage
Failing to conduct a financial background check on a tenant: a financially unstable business could drag you into a debt collection process
Listing poorly presented spaces: offices that are in poor condition or poorly photographed significantly prolong the time they remain vacant
Don't overlook the tax implications: income from subletting is taxable; consult a tax professional

Coworkea helps you find office space to rent

Coworkea is an agency specializing in the rental of unused office space and connecting host companies with qualified subtenants. Our approach stands out for several key strengths:

Systematic market research conducted prior to each assignment to determine the optimal price
Multi-channel distribution of your ad on major specialized platforms
Rigorous candidate screening: financial analysis, reference checks, industry fit
Legally sound contracts, reviewed by specialized attorneys
Comprehensive support through the signing process and beyond

It’s not uncommon for some of our prospects who were searching for office space to rent on our website (because they needed to move since their offices had become too large) to eventually become Coworkea clients ashost companies. This solution allowed them to stay in their offices and more than cover their rent, which was often old and competitive.

FAQ: Your Questions About Renting Out Unused Office Space

Is it legal to rent out unused office space?

Yes, subleasing unused office space is entirely legal, provided that you comply with the applicable legal framework. If you are a tenant, you must obtain your landlord’s prior consent. In any case, it is recommended that you formalize the arrangement with a written agreement (service agreement or sublease agreement).

How long does it take to rent out unused office space?

The average time it takes to rent out your unused office space typically ranges from 1 to 3 months, depending on the location, the asking price, and the quality of the listing. Working with a professional like Coworkea can often significantly reduce this timeframe thanks to a network of pre-screened potential subtenants.

What documents should you ask a subtenant to provide?

To ensure a smooth process when leasing out unused office space, always request the following: the last two financial statements, a Kbis extract issued within the last three months, a certificate of professional liability insurance, and references from previous landlords if possible. These documents will help you assess the tenant’s financial stability and reliability.

Is it possible to rent office space without going through an agency?

Yes, it is entirely possible to rent out your unused office space without using an agency. However, without the necessary expertise or network, the process can be time-consuming and fraught with challenges (incorrect pricing, unattractive listings, unqualified tenants, inadequate contracts). Hiring a specialized professional like Coworkea is an investment that pays for itself quickly by reducing vacancy rates and securing the contractual relationship.