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As evidenced by Arden’s lease assumption, tenants are able to reduce their “total occupancy costs” with up to five years remaining on their lease by restructuring their current lease, relocating or subleasing inefficient space. As a tenant, the current economic conditions provide a fantastic opportunity to reduce your overhead and increase your bottom line profits by locking in lease rates that are at a two year effective low, and vacancy rates that are at a five year high.
- Review your operating cost pass-throughs to verify that you are not paying extra for expenses that should be excluded under the terms of your specific lease. For instance, have the increased security costs of your Landlord’s entire real estate portfolio been unjustly passed on to you? Ask questions!
- Have an experienced real estate consultant represent you in renewing, renegotiating or relocating of your office lease. This is too large of a financial consideration for you not to utilize the services of a professional. Attorneys don’t represent themselves in court; landlords and their representatives negotiate leases to benefit their bottom line and know how to disguise many additional costs that might not be apparent until after your lease commences. Representation for the tenant is not an expense that you, as tenant, have to pay the landlord is responsible for brokerage commissions!
- Have an office leasing consultant compare your lease to other leases currently being signed in the market. We have a program that is specifically geared to providing this service free of charge. We would be happy to speak with you about this program!
- Begin reviewing your options in the marketplace 10-24 months prior to your lease expiration regardless if you are considering renewing, renegotiating or relocating. It is imperative that you allow enough lead-time to increase the amount of leverage and competition created among various buildings which all result in substantial savings. Give yourself enough time to make an educated decision.
Has your Landlord been holding firm on your lease renewal rate that appears to be above market? Are you getting the attention you need from your Landlord? How do you ensure the best renewal rate possible in a fluctuating economy?
Have an experienced real estate consultant represent you in renewing, renegotiation or relocation of your office lease.
Landlords are feeling the pinch from the slow market, faced with increased tenant vacancies and lower rental rates for new transactions. The last thing a Landlord wants to lose is it’s current tenant base. Therefore, it is very important for Landlords to renew their existing tenants.
There is great opportunity as an existing tenant, to renew your lease with very favorable deal terms, net resulting in you saving money. However, Landlords typically will not present their best deal to an existing tenant until they feel that there is a possibility of losing that tenant. By hiring a broker to act as negotiator, the landlord understands that there is a credible threat the tenant may move. Therefore, owners are usually much more willing to negotiate more aggressively from the start.
The Landlord’s intentions are simple: maximize the asset’s value. However, the Landlord’s strategy, when negotiating with you, can be complex, taking into consideration all the reasons an existing tenant might move versus all the reasons they might stay and what concessions (lower rent, Tenant Improvement Allowances, Free Rent, Flexible lease term etc.), if any, might the Landlord have to give to the tenant to entice them to stay. The Landlord understands and weighs the risks on losing it’s tenants based on the feasibility of a tenant move. A tenant move is costly. The tenant has moving costs, possibly furniture, phone and data cabling costs, stationary cost and loss of potential business during move down time as well as significant business interruption. However, the Landlord understands that if his/her tenants move, he/she could lose many months of rent while waiting for a new tenant as well as additional monies on marketing costs, including new build-out costs, architect fees, to relet the space. If the tenant does not want to move, the best strategy for both the Landlord and Tenant is to create a mutually beneficial scenario where both sides win. Having a broker act as an intermediary between Tenant and Landlord will help facilitate this process.
Too often the communication is lost between the Tenant and the Landlord because there is no negotiator in between keeping the lines of communication open. Even if you decide to move, don’t let negotiations break down with your current Landlord before signing a new lease and securing a new location. Whether you are set to move or not, having options is essential.
We have had great successes in helping our clients achieve their goals and exceed their expectations. Having us on your side, is free of charge to you (the Landlord pays our fee, usually half the standard fee for new transactions) and will not negatively impact your deal with the Landlord. In a lease renewal situation, we provide:
- Strategic Planning by analyzing current and projected space needs
- Review of your current lease agreement, insuring all terms are most market favorable to the tenant, no “hidden” clauses or options
- Provide current comparable market data as well as financial analysis of all options
- Advise you on any money saving lease issues
- Negotiate with current Landlord on your behalf, leveraging he/she with other comparable available options in the marketplace
Having us involved will insure your get the protection and assurance you deserve as well as the services of a professional negotiator for free.
Don’t wait until the last minute to renew your lease. Bring us in to advise you at lease six to nine months prior to your lease expiration.
We have been successful in renegotiating/renewing our client’s leases and lowering their current lease payments with up to two years remaining. Please inquire for additional information and benefits.
Which measurement determines a tenant’s lease payment and why. Usable square footage is the actual area of occupiable space on a floor or in an office suite. This is the tangible space that can be seen and measured within a suite or on a floor. The usable area of a floor or suite is subject to change over time as modifications are made to the floor or suite. For instance, if corridors are added or expanded the usable area will shrink as space is taken from the suite and used by the new hallway and the opposite holds true. When corridors are removed or contract the usable area of the floor increases. Rentable square footage is the usable square footage of the suite plus a tenant’s percentage or share of the common areas; i.e., lobbies, hallways, restrooms, etc. The factor that defines this difference is referred to as the Load Factor. If the load factor for a suite is 15% then multiply the usable square footage of suite by 1.15 and the result will be the rentable square footage of the suite. Load factors vary from building to building and floor to floor. The average load factor for a multi-tenant floor is about 15%. Load factors are also subject to market conditions and should be negotiated by a tenant’s Broker.
