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What other hidden costs should I watch out for?

Ed Dintrone, president of NETexponent, a search optimization firm in New York City, says that in addition to the rent he pays for his 1,600 square feet in Manhattan, each month he also pays $80 for water, $80 for sprinklers, $100 for garbage collection, $150 for cleaning, and $50 for a doorman during regular business hours. Dintrone recommends that you have utility bills mailed directly to you, rather than letting a landlord pay them and invoice you. You should also ascertain whether you will be held responsible for HVAC repairs. When Dintrone was leasing space for another company in 1997, the building he chose had a very old central air conditioner. When it conked out in the middle of July, Dintrone was stunned to discover that, according to his lease agreement, he was the one responsible for fixing it. Not only did the repairs cost a few thousand dollars, but Dintrone had to rent several large fans in an attempt to cool himself and his suffering employees while the system was down. Now, before he signs a lease, he always asks how old the central air conditioner is and who is responsible for fixing it if it fails.

Cairo Corp.'s old lease specified that Alba Aleman pay a percentage of the building's total maintenance costs, which fluctuated along with building occupancy. "Several tenants left the building, so more of the operating costs were being shifted to us," says Aleman. "There was hurricane damage that caused flooding in the basement, and we were having to pay for that." The charges eventually added 8% to the rent bill.

Some landlords also try to slip a bogus escalation clause into a lease that allows them to increase rent gradually. It's often tied to an outside economic benchmark like the consumer-price index, which has little to do with actual real estate prices. Reject it.

My company is small. Should I consider subleasing office space from someone else?

Like factoring your receivables, subleasing space is a concept that exists to help small businesses, yet it paradoxically engenders great skepticism among them. Diana Pisciotta, managing director of communications consulting firm Denterlein Worldwide in Boston, says that when her firm's five-year lease recently ended (for a 2,500-square-foot space on the fifth floor of a six-story historical building), she wouldn't even consider subleasing, no matter how much cheaper the prices were. "I don't want to be the smallest tenant in the building, sharing a space with a big corporation," she says. "The landlord has no incentive to take good care of you." In June, she signed a new lease with the same landlord to take up an entire floor in the building she was already in.

Steve Marsh rejected subleasing for a different reason. The founder of Smarsh, a San Francisco firm that archives e-mails and instant messages for financial companies, pursued several sublease opportunities while hunting for space for a branch office in New York City this past June. But he was put off for security reasons. Because his computer systems house sensitive client information, it was unacceptable to him that sublessors couldn't tell him exactly who would have access to his space.

With these concerns duly noted, it's fair to say that subleasing has worked out great for some people. Two years ago, when there was less commercial space on the market, Justin Abernathy moved his direct marketing company, SureClick Promotions, to a brownstone on the outskirts of Washington, D.C. Having outgrown the space, he recently took over another company's lease for a 4,600-square-foot furnished office downtown. All it needed was a little repainting. Abernathy pays $8 less per square foot than what the tenant is charged. He's already hired five new employees who wouldn't have fit in the old space. And he only has an 18-month commitment, with an option to sign a longer lease later. "For me that was better than signing a five- or a 10-year lease because I don't know if we'll need this much space five years from now," he says.

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