An unfavorable commercial lease can be a difficult burden for any business to overcome.
Commercial leases are usually negotiated on with lengthy terms, especially since landlords typically offer concession packages to secure great tenants.
Nobody wants to be in a situation where they’re paying too much for space they don’t need, or not getting the most out of the space they have.
Extended lease terms mean that every negotiation can have a huge impact on your company’s bottom line. With that in mind, here are some tips to make sure you get the best deal possible.
The first step towards putting yourself in position for a great new lease is to understand your current lease in detail. Consider any holdover, restoration, extension, and termination costs before you begin eyeing other properties. In addition to these financial factors, ask yourself if your current space works for your business. Are you growing at a rate that will outpace your current location? Is your current office space conducive to success? A lot of companies stay in a space because it’s the least disruptive option, even if it’s not the best for their business. Take the time to consider whether a relocation is right for you.
Once you understand your current situation, take a look at competing market options. Research other completed leases in your area to understand the trends in rental rates and lease terms. The more you know going in, the stronger your negotiating position will be. Understand how your credit positions you in discussions with your landlord, as it can be a significant factor in creating leverage. If your current lease has clauses you find detrimental, don’t repeat them this time around. Flexibility is a huge bonus, particularly if you expect your workforce to expand.
Our team at Effective Realty Advisors can help you maximize the value of your next lease and ensure it’s aligned with your business. Let us help you underwrite the market.
Michael Staskiewicz, CCIM, Managing Principal of Effective Realty Advisors and a team of strategic partners, help financial decision makers of mid-size companies perfectly align their real estate with their business needs, so that they increase profits and improve operational and financial performance.
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