You're busy keeping your company afloat. It feels like you just barely got settled in your current location when you realize that you've got less than a year left on your lease term. You're not ready to think about a renewal or a potential move, but here are the top 5 things you need to do before it's too late:
Options to extend are likely incorporated into your current lease agreement. Put a big "X" on the calendar on that date and be market informed before the day comes.
It's impossible to make a good decision about an upcoming renewal unless you have a good idea of the rental market for similar space in your area. It's easy to find available commercial space on the internet these days, so take 30 minutes to investigate comparable sites and their cost. Talk to other tenants in your building to inquire about their terms, incentives and tenant improvement allowances. Information always precedes a successful negotiation. You can't go blindly into a conversation with your landlord and expect favorable results.
Landlords love to include tenant improvements and free at the front of the term for new occupants in their buildings. The base rental rate over the initial term is increased to reimburse the landlord for these concessions. Renewal options then establish a new price point above and beyond the rent paid in the final year of the term. Don't forget to fight for a discount in any renewals if no additional upgrades are completed.
The pandemic has forever changed how we utilize commercial space, whether it's office, retail or industrial. Complete an internal audit prior to your notice to renew date. Technology platforms are continuously rolling out that can help you minimize your footprint and maximize efficiency in human resources, manufacturing and logistics.
Flexibility is the greatest competitive advantage your business can achieve in the modern world! Fight for the shortest lease term possible. Keep records of the internal processes required to complete this exercise and be ready to jump through the hoops again at a moments notice. All of the worst commercial real estate deals are negotiated from a desperate position where multiple options are not available. If your landlord knows that you are prepared and ready to vacate, only then will you be able to get the best deal possible.
Of course, our unbiased, transparent and comprehensive experience at Logical Move can help you navigate the murky waters of this phase in your commercial occupancy!! At no cost to you, we can show you how to use commercial real estate information to your advantage. We are happy to complete an abstract of your lease agreement in order to help you determine the best strategy.