At J.Andrea, we understand the importance a lease can have on the profits to your company.
The following guide is meant to help you with the issues and the risks you face as your expiration nears.
Whether you choose to work with J. Andrea for your lease renewal or possible relocation, we’re confident this information will serve your practice well.
Our company’s reputation is built on the quality and value of the advice we provide. This guide is our way of continuing to provide our community with more ‘commercial realty solutions’.
Mitigating risks with a plan
even if you want to stay put
If your landlord thinks you’re going to stay he will assume that he has no competition. Therefore, the options that you have are limited to his building and this gives him a stronger negotiating position resulting in higher costs to you.
This won’t happen if you have a plan that explores your options. The plan will not only let your landlord know that you may have interest elsewhere, but it also provides you much needed leverage and market knowledge assuring you the best lease terms possible.
Understanding the conflicts of interests you face
Leases are designed to protect the landlord’s property, ownership rights and lending institution. It’s this situation that creates the need for conflict-free, tenant representation.
Building owners typically make more profit in a simple renewal than in leasing to a new tenant. Understanding this dollar amount is imperative in winning back a portion of this in exchange for renewing your lease. Despite what your relationship is with your landlord, their interests are often not aligned with yours.
The danger of assuming market conditions
Unless you’re a commercial real estate professional, you may not be fully aware of the market conditions. Understanding owners business goals and cost structures such as the amount of debt on the building, taxes, and operating costs are necessary in obtaining a beneficial lease for your company.
Being aware of market concessions and discounts that other landlords are offering will further strengthen your position and create the leverage necessary to lower your overhead costs.
Negotiating for yourself
Negotiating is time consuming and downright painful if you have no leverage. Creating leverage requires a well developed real estate strategy backed by relevant market information and options. Unless you’re able to present viable options backed by strong financial analyses’, your landlord will be unwilling to negotiate substantive points within your lease.
It’s true that you may love your office space and want to stay, but appearing as if you’d like to relocate provides much needed negotiating leverage. Also, you may find space in another building that better suits your needs, provides more amenities and increases visibility, thus business.
The longer you wait to start the planning process, the greater the likelihood that you’ll be forced to live with the terms that are offered. Have a real estate strategy developed one to two years prior your lease expiration.
Choosing a tenant advocate or a landlord’s agent
At J. Andrea commercial realty solutions, we turn real estate into a strategic advantage. Your lease will conform to your business goals while providing the flexibility your business may require due to unexpected changes in the economy.
Our approach is simple. We represent only tenants and provide a conflict-free, fiduciary relationship that tenants need. Overhead costs are the second most costly line item next to an organization’s employees so it’s vital to be represented by a firm that only represents tenants and their best interests.
Not only will we give you back the time you’d spend negotiating a lease on your own, but we produce measurable results typically saving clients up to 25% in occupancy costs. If you find yourself within two years of your lease expiration begin your due diligence process by having a complimentary real estate strategy developed. We welcome an opportunity to earn your business and build the kind of trust you can depend on year after year.
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