Office Selection Guide for Startups: Types, Cost Ranges, and Key Selection Criteria

For startups and venture companies, choosing an office is a critical decision that can determine the success or failure of the business. Selecting an office that matches your company's current size and future outlook enables both cost management and growth. This article explains the types of offices available, key selection criteria, and typical costs.

What Types of Offices Can Startups Choose From?

There are multiple options available to startup companies. Understand the characteristics of each and choose the format that best suits your needs.

Leased Office

A leased office is the most common format, where a section of an office building is used under a rental agreement. You can freely design the interior layout as your own dedicated space and it tends to inspire trust from clients; however, initial costs are high, as security deposits may require up to 12 months' worth of rent.

Shared Office / Coworking Space

This format involves sharing workspace with other companies. The main advantage is that initial and monthly costs can be significantly reduced. While it creates opportunities to interact with other companies, the lack of a private room presents challenges for security and focused work.

Virtual Office

This is a service that provides only the right to use a business address and phone number. It offers the lowest cost when an actual office space is not needed. Corporate registration is possible, but it is not suited for receiving visitors or on-site operations.

Rental Office

This format rents private rooms by the hour or month. Since desks and communication infrastructure are already in place, you can start working immediately. Freedom to modify the interior is limited, but short-term contracts are available, offering high flexibility.

What Should Startups Consider When Choosing an Office?

Make your office selection by evaluating the following points comprehensively.

Size and Contract Term Aligned with Your Business Plan

Secure enough space to accommodate your headcount 1–2 years from now, factoring in your hiring plans. For a startup in a growth phase, short-term contracts or scalable office spaces are ideal.

Location and Accessibility

Choose a location that considers both commute convenience for employees and accessibility for clients. Central urban areas are advantageous for credibility, but rents are higher.

Cost Balance

A general guideline is to keep office-related expenses within 10–15% of revenue. Judge based on total costs including not just rent, but also utilities, communications, and common area fees.

Security and Communications Infrastructure

For IT-focused startups, high-speed internet and security are essential requirements. Check for access control systems and surveillance cameras as well.

What Are the Typical Office Rent Rates by Area?

Familiarize yourself with the typical rent rates in major areas.

Area	Typical Rent (per tsubo / month)
Tokyo · Marunouchi / Otemachi	¥30,000–¥50,000
Tokyo · Shibuya / Ebisu	¥20,000–¥40,000
Tokyo · Shinjuku / Ikebukuro	¥15,000–¥30,000
Tokyo · Gotanda / Meguro	¥15,000–¥25,000
Osaka · Umeda / Honmachi	¥10,000–¥20,000

Popular areas among startups include Shibuya, Gotanda, and the Akihabara vicinity, and areas with a concentration of IT companies are also advantageous for recruiting talent. Consulting a real estate management specialist is also an effective approach.

What Important Points Should You Verify When Signing an Office Lease?

• Termination notice period: Typically 3–6 months' advance notice is required
• Restoration obligation: Confirm the restoration rules upon vacating in advance
• Deposit refund conditions: Clarify the amortization rate and timing of refund
• Prohibited activities: Check restrictions on signage installation and interior modifications