Making Timely Decisions – Office Space Leasing
As a Commercial Real Estate Broker and previous Facilities Management Executive, I try to convey to my clients the importance of timely decision making when looking for commercial office/retail/industrial space or when negotiating a lease renewal. When looking for a new location, the best locations at aggressive rates will go fast! If you have a lease that is expiring and you need to move by a certain date – allow yourself 6-12 months to find the right location, negotiate the lease and get improvements completed. Most leases have a Hold Over Clause or Section, that can increase your rent by 125% to 200% of your current lease rate if you haven’t moved out by the exact lease expiration date. It can be a costly mistake to wait too long to find a new location, and then have to “hold over” at your current location at an increased rental rate because your new location is not ready yet. On a lease renewal, try to re-negotiate a lease when the market conditions are “ripe”. Another words “ripe” meaning – when lease rates are low. A lease renewal or extension can be negotiated in most cases within 12-18 months of the lease expiring. Landlords appreciate an early renewal – as then they know they have a tenant for an extended length of time and this increases the value of their property. Tenants are then relieved to know that their lease has been renewed early and can focus on their core business. As always, use a knowledgeable Commercial Real Estate Broker for both renewals and finding a new location to negotiate a new lease.