No Comments

Renewing Your Lease? Consider This First!

Renewing Your Lease

Need to Renew?

 

Renewing a lease can be a pretty overwhelming and complex situation for corporate tenants who are accustomed to simply doing their job and not worrying about real estate.  While that’s tough, it’s also a way to learn what the current market is doing and how the current position of your business can determine whether you can negotiate better lease terms moving forward.

When you truly understand your options during a lease renewal negotiation, you can be a force to be reckoned with.  A tenant representation broker will arm you with market knowledge that you may not otherwise be privy to, help you to negotiate a lower rate, acquire additional amenities, and secure  the best deal possible for your business.

Read on to find out more way you can ensure a good deal for your business as well as how you can protect your future commercial real estate ventures.

 

Negotiate Early…It Only Makes Sense

 

When considering a commercial real estate lease renewal, it is always best to be proactive. Evaluate your situation, determine what is and is not working for your business, and communicate with your landlord 9-12 months before your lease agreement expires. Your landlord will consider these points while reviewing your renewal and will be well aware that time is on your side – time for you to look for a new space if your concerns are not fairly considered.

In the event that you don’t have time, I’ve got you covered.  What I just described is the best-case scenario, however, I have closed Class A office space deals within the span of a business week so I know it can be done.  If you have a tenant representation broker who is “Johhny on the spot” and is as “quick as lightning”, then you’ve got a great teammate fighting for you.  That kind of broker will alert the landlord upfront that “time is of the essence” and the deal needs to close fast.  If the landlord is on board, you’ve got a great situation in front of you and even greater representation behind you.

 

What’s Going On With Your Current Space?

 

Before making any sudden decisions, take the time to analyze how your business is performing in its current commercial space. This is an opportunity to determine if the space is still suitable for your company and its future growth. Items to consider are location, amenities for employees, office configurations, and tech-enabled infrastructure. These can all serve as discussion points in the negotiation of your renewal. There is a possibility that your current landlord may incur these costs if it means keeping your company as a tenant.  When you determine these factors, you can really increase your market knowledge which will facilitate an opportunity for you to have more leverage in negotiation.

 

Understand the Market Conditions

 

The commercial real estate market is dynamic, resulting in continuous changes year after year. It is important to be up-to-date on the current state of the market when looking to sign a new commercial lease or renew your current lease. Look at the market around you; are the rents similar to what you are currently paying for space? Are there other properties that offer additional benefits? Having this knowledge gives you the ability to be well informed while negotiating your current lease. If there is the potential to have some of these added benefits, lease renewal is the time to present them to your landlord.

Once you are more knowledgeable about the current market conditions, ask your tenant representative to negotiate an option or two for you.  The market changes every year so it would best serve you to lock in a good rate for as long as you can.  If it costs too many dollars for the same thing you had last year, it doesn’t make sense.  Don’t you agree?

 

Research Alternative Options

 

Even if you are comfortable in your current commercial space, it is always beneficial to educate yourself on other buildings and owners in the market. You may determine an opportunity that is a better fit for your company. Availabilities, rental rates, and amenities have probably changed since you were last in the market, so it is worth the time to look at your options. During your research, you will become more knowledgeable about the commercial real estate market. Whether you stay in your current space or sign another commercial lease, this information can benefit your negotiation process.

 

Work with a Commercial Real Estate Broker to Negotiate

 

Do not underestimate the importance of using a broker to help you negotiate your commercial real estate lease renewals. In addition to sharing their market expertise, tenant representation brokers are always aware of the current market conditions, opportunities, owners, and other brokers. They provide you with leverage to get the incentives that you and your business deserve and have a genuine interest in seeing you win.  Tenant reps know how important the right office space is for your business. An experienced broker can add value to your commercial lease renewal process, negotiate any required terms, and answer any lease related questions.

No Comments

Looking to Move Your Office? Leave it to the Professionals

Looking To Move Your Office?

 

You are a successful business owner and everything is booming in your world. 

Your current location has been good to you but your client base has grown dramatically.  The past few years have afforded you a great proof of concept but you know you could offer your clients more.  You know you need a new atmosphere and better location to best serve your clients.  Where do you start?  How do you accomplish that?

It sounds like you a need a tenant representation broker.  A broker will find you a great new space and negotiate you a killer deal.  That sounds simple enough, right?  Let’s delve in a little deeper.  Read on for your “no-cost-to-YOU” solution for getting a better space.

 

#1: YOU are the first priority

 

A tenant rep will have great relationships with many landlords and listing brokers.  As a result, this will lead to a smooth transaction for you.  Tenant representation brokers work on your behalf.  They have no obligation to landlords or the buildings they present. It is their legal, fiduciary responsibility to you to evaluate buildings, locations, and leases without any bias.  Additionally, they will not promote one building over another. Tenant representatives will work to position your deal in the marketplace.  They will also leverage the best possible transaction both qualitatively and quantitatively.  They will help your bottom line.

 

 

#2: Evaluating commercial real estate is a full-time career

 

In order to accurately identify lease opportunities, significant time and work goes into the process.  This is time that you, like many professionals, don’t have to spare. Tenant representation brokers will determine your unique office needs and engage the market.  They will analyze all alternatives and negotiate terms.  Ultimately, they will find you an office space that meets your business needs. This process will ensure that you make the proper real estate decisions while paying attention to your operations.

 

#3: We focus on what we know so you can focus on what you do

 

Rather than taking time to educate yourself on the commercial real estate market, a tenant representation broker will do that for you.  They can manage everything from needs assessments, parking requirements, zoning restrictions, and as well as establishing timelines and the lease execution. The decisions you make now will impact the efficiency, productivity, and profit of your organization.  A tenant representation broker is sensitive to that.

#4: Tenant reps help you to determine what’s best

 

Defining and analyzing your business objectives will help you determine what you need in your office space.  A tenant representative will apply consideration to your budget and future growth. Do your projections include expansion?  Do your employees need to be near public transit?  Do you need all offices on glass?  Is walkability a major factor for your business model?  A tenant representation broker will know all of the right questions to ask.  This will help to determine the right commercial space for you.

 

#5: Tenant representatives have numerous resources…seriously

 

Searching for new space on your own can be frustrating. It is difficult to get an accurate idea of what’s available in the commercial real estate market.  Many websites that have out-of-date or incomplete information.  It may even be hard to get a listing broker to call you back!   A tenant representative will have the most inclusive list of commercial real estate options in the market. Tenant reps have access to exclusive commercial real estate databases, industry relationships and knowledge of off-market options.  This enables tenant reps to give you a variety of quality options that may not be possible to acquire on your own.  If you don’t believe me, try calling a few numbers on the “For Lease” signs and see how things go.  You’ll see that I’m right!

 

#6: Tenant Representatives will handle negotiations

 

Going through the negotiation process can be overwhelming.  Having a tenant representative who knows the market and is exclusively representing your interests is important. They understand the need to capitalize on timing and market conditions.  They will apply negotiation techniques to create the most leverage on your behalf. This will help you receive the best lease terms possible without the stress of negotiating alone.  Lastly, they know the tricks of the trade which will help you.

For instance, if the market price for milk is $3.06 per gallon, you will pay $3.06 for that gallon of milk from the grocery store.  If you are a vendor, you could go directly to that distributor and negotiate a much lower price point.  As a vendor, you have more negotiation power.  Distributors deal with vendors.  HMOs deal with doctors.  Landlords deal with tenant representation brokers.  It’s as simple as that.  Landlords will always negotiate with tenant representation brokers on your behalf.  They do so because they trust the tenant rep to qualify their client before bringing them to the space.  This saves the landlord a time by not having to qualify the prospective tenant upfront.

Tenant representatives can get you a ton of other incentives.  Some include free rent and a break on the rental rate.  They may even be able to get you more concessions!

 

How Much Is It Going to Cost Me?

On a final note, remember when I said you can get your space at no cost to you?  Let me clarify!  Tenant representation services are free because the landlord pays your representation for you.  I know that sounds super crazy but that IS how this crazy thing works.  The landlord sets aside a budget for representation when he/she acquires a commercial property.  Whatever that budget is, is typically split down the middle.  Half goes to the landlord’s representation and the other half goes to the tenant’s representation.

Why would a landlord do such a thing, you ask?  A landlord is willing to pay a tenant rep’s commission because he/she feels confident that they are bringing a viable tenant to their establishment.  They are willing to pay for that.  I know it’s weird and I don’t make the rules…I just play by them.  If you are looking for office space, I’m more than happy to point you in the right direction.  I hope you found this helpful!