Lease Renewals/Restructures

Commercial real estate leasing when done correctly is a complex exercise.  When a lease is up for renewal an opportunity is presented to correct initial oversights in build out, flow of space and total occupancy.  However curtailing occupancy cost during the renewal option requires sophisticated tactics, analytical analysis and experience beyond the competencies of many brokers that seek to represent your company.  Whether your company is a former start up outgrowing existing space that enjoys the current location or your organization has reached the stature of a desired tenant, a lease renewal should be approached strategically.  Space Advisors can provide the expertise and research to help your company assess the following regarding your current location:
  1. Contrast/Compare your location to other market available spaces.
  2. Reduce existing footprint at current location.
  3. Market inducements for relocation.
  4. Renegotiation timelines that produce competition to retain your tenancy.
During a renewal tenants often fail to realize the leverage available to them in negotiations.  Whether the ownership entity of your current location is a local landlord, regional developer or REIT (real estate investment trust) every owner faces challenges that you as a tenant can reduce, by staying put.  Potential risk to landlords include the following:
  1. Inability to re-capitalize the property due to low occupancy-especially if you move
  2. Loss of income and increased costs associated with vacancy, build out and brokerage fees-if you move
  3. Dividend reduction due to tenant rollover in property portfolio
  4. Loss of property value to ownership for an unsuccessful renewal
All renewals should be confronted with a multidisciplinary approach that will implement operational and financial choices that promote the viability of a tenant’s business operations.