Private Sector Office Space
ARS § 41 – 792. D. mandates the Arizona Department of Administration (ADOA) to approve all state agency leases for privately owned office space. The Board of Regents is responsible for approving state university leases.
ADOA requires agencies to utilize the services of its real estate tenant broker (Contracted Broker) when initiating a new lease and when renewing, amending (except for administrative amendments), and/or re-casting (renegotiating) an existing lease. The contract prohibits entering into an oral or written contract for private sector lease representation with any other real estate broker.
- Provide annual lease cost data to the Lease Cost Review Board, which must estimate the annual average square foot dollar cost for private office leases.
- Ensure that state agencies are leasing space at the most economical available rate per square foot.
- Achieve consistency in the format of state lease contracts. All lease documents must conform to the legal requirements established by the Arizona Attorney General Office (AGO) and utilize the ADOA boilerplate lease template document.
- Maintain an accurate database for leased office space that will support budgeting, planning, and reporting responsibilities.
Basic Leasing Definitions
- State Agency – all agencies, boards, and commissions, excluding the Board of Regents;
- Office Space – privately leased space in which business, clerical, or professional activities are conducted, including storage and laboratory functions;
- Amendment – a revision of or change to the terms of an active lease;
- Addendum – the addition of terms, conditions, or clauses to an active lease;
- Full-service lease – includes all costs associated with using the space; i.e. base rent, taxes, utilities, janitorial, and parking;
- Net Lease – does not include one or all of the costs usually associated with a full-service lease including, but not limited to, occupancy taxes, janitorial, utilities, and parking;