There are five questions that help outline the minimum requirements that a company owner/decision maker should consider before embarking on your next leasing adventure:
- How much space is needed, and what are the general location parameters?
- What is your budget for the new space?
- When do you intend to move?
- Who will oversee finding space options, touring, lease proposal review, space planning, construction plans and pricing, lease negotiations, & lease documentation?
- Should you just renew the lease because it’s less work and the space seems to work OK?
Many business owners can answer questions 1, 2, and 3 without much of a problem. However, question 4 is where things get messy and overwhelming. Leasing space is a process that is quite long, tedious, and challenging. Most companies do not have the time or expertise to handle this, so 75% of them choose to renew their lease instead of looking for alternate space to serve their needs better. It is much easier to renew a lease, but at what risk?
Of course, landlords are also aware of this percentage, which is why lease renewals tend to be overpriced versus other spaces in the market. Most landlords don’t offer as many concessions on a lease renewal as compared to what a tenant would get on a new lease. Despite these factors, many tenants renew their leases out of convenience because they don’t know what kind of deal they are missing in the market.
What if there was a way for a business owner to outsource the items in question 4? Good news¾there is a way! A dedicated corporate real estate advisor works with businesses to find and evaluate space options and then negotiates lease terms on their behalf. Did you know they can also negotiate a potential lease renewal while other spaces are being considered? This is the best way for the business owner to compare moving versus staying.
When a business retains a corporate real estate advisor and provides them with the information noted in questions 1 through 3, the advisor can move the leasing process along with minimal time spent by the business owner or decisionmaker on questions 4 and 5. More importantly, an experienced corporate real estate advisor knows the market, the available space options, and the lease concessions available to ensure the company is getting the best lease terms on that next new lease or lease renewal.
All ITRA Global members exclusively represent tenants and provide principal-level expertise based on transparency, integrity, and trust. With members worldwide, ITRA Global is uniquely positioned to meet all your real estate advisory needs. So, before you talk to your landlord about a lease renewal, consult with one of our commercial real estate experts near you here.
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Article submitted by Wayne Teig, ITRA Global Minneapolis-St. Paul, Minnesota USA
