Dealing with lease renewals and deciding whether or not to move out of your current business location can be a stressful process. It can be difficult to know whether you’re making the best decision for yourself and your business to stay where you are or if there are other locations better suited to your needs. The cost and hassle of moving can sometimes outweigh a rise in rent, but by tackling the problem early on, commercial tenants can make the most of their situation and figure out what course of action will best suit their needs.
More Time Means More Leverage
Allowing more time to discuss your lease renewal with your landlord means that you have more leverage. If you leave the decision down to the wire, your options are limited and your landlord will know that. When you have just a brief window between the time you open up negotiations and the time your lease expires, your landlord has the option to evict you or force you to overhold beyond your expiry date. That could lead to an overhold penalty, not to mention force you into a location that doesn’t work for you or the health of your business.
When you give yourself plenty of time to discuss your lease renewal, your landlord knows that you can go out and find a better deal on rent if you’d like. The risk of losing you as a tenant will give your landlord more motivation to negotiate, and if you find that the situation won’t work for you, you can go look elsewhere for a better option.
Set Yourself Up With Options
The best way to create a successful decision outcome is to give yourself plenty of options and acceptable alternatives. This way, when you’ve reached a point where you need to either renew your lease or find a new location to set up your business, you’ll have all the information at your fingertips. You’ll be able to make the best decision for yourself based on the latest prices and availability.
As an operating business, you’ll need to create several potential options for yourself to incorporate into your lease and location options. Typically, your options include renewing your current lease, relocating your business to an existing building, relocating into a newly constructed building constructed to your needs, or relocating into a building that you purchase. Each of these have varying time and cost considerations. All of these options might be available to you, but only if you take action early enough in the lease renewal process to give yourself time. Otherwise, it is likely that you will be forced into a lease renewal on undesirable terms.
Avoid a Rushed Negotiation
The process of negotiating a lease agreement tends to take time. There are several steps that you and your landlord need to work through in order to get a finalized offer and signed agreement. There are negotiations to go through, communicating back and forth about the matter, and drafting the paperwork. Then there’s the legal review, information gathering, final feedback, and the approval of the final deal. Ideally all informed and supported by solid market intelligence. This multi-step process can hit numerous speedbumps and unexpected slow-downs that can dramatically limit your options if they take too long. Leases are only getting more complicated, and this process tends to take longer than you might be used to. You don’t want your business to be put in a difficult spot because the lease process stalled out. Make sure that you have plenty of time to work through a renewal so you can keep your business’ needs as the priority rather than the timeline. Additionally, you can always ask for consultations with professionals to keep the process running smoothly.
However, if you do find that you’re running out of time, rushing the process is not in your best interest. Typically, a rushed lease will only result in mistakes that hurt the tenant. Landlords have experience and expertise in the real estate industry that gives them a leg up on their commercial tenants. They know exactly how to capitalize on any mistakes made by their tenants, and if you don’t catch the error before you sign on the dotted line, you are stuck with whatever the contract stipulates. Better to take the time you need to go through the deal effectively than rush to meet a deadline.
Take Advice from Professionals
One size does not fit all when it comes to commercial lease renewal. Your unique situation requires different approaches and different advisors, and you’ll want to make sure that you give yourself time to find the right person to walk you through the problem at hand. These professionals can help you establish the selection criteria that will work best for your business and work through the interviews of different parties to help you make an informed decision about your commercial lease. If you are too rushed, you’ll likely be forced to choose the cheapest or most readily available advisor for your business, and in most cases, it won’t be the best person for the job.
At Landmark Advisory Services, we pride ourselves on representing commercial tenants. Our goals are your goals, and we provide the kind of unbiased point of view that leads to the best decisions for your business. We represent tenants only, and we will always have your best interests in mind throughout the lease renewal process. Our business model is designed to provide the best results to our clients. If you’re looking for best in class professionals who will help move your business forward with effective commercial real estate advisement look no further. Contact us here for more information.