When it comes to renewing your current lease, often the property manager would issue you an offer to renew your lease or exercise your option to renew, with a higher rental structure but without a higher/market incentive. Again, this would be the standard paradigm for the landlord’s best interest.
Nine out of ten tenants would agree to the proposal without considering the situation of the building or centre they are in. Imagine this, if the building has large vacancy or the
surrounding market carry higher vacancy rates, this would mean that the landlord would be keen to retain its tenants.
Know that, financials or rent & incentive, are the most easy terms to be agreed upon – however determination of them will require knowledge & expertise.
Here is a few aspects that a tenant will unlikely to consider when renew their lease:
Existing Lease Conditions:
- Your current lease may have some onerous conditions or hefty make good conditions and when you renew your lease, this would be an opportunity when you can renegotiate these terms. Same way, you can also include additional conditions to your favour, i.e. break clause or assignment conditions, etc. when renegotiate your current lease.
Amenities:
- One of the key areas where most of the tenants complain about is the amenities of the building or centre. If the standard of the amenities isn’t to your satisfaction, this is an opportunity to address this issue.
Vacancy Rates:
- It’s paramount that you’re across the vacancy of the building or the centre as well as the area that you are in, this will factor greatly in your new rent and incentive offering. If the vacancy rate is high in your current building/centre, this will mean that the landlord would be keen to retain you.
Market Incentive:
- You can only negotiate the market incentive once you’re aware of the market incentive rate. At Swinburne Property, we are extremely passionate about the industry and constantly monitoring leasing transactions that are taking place in the market and this way, we would be able to advise you the best outcome.
Notable Renewals:
- We will advise you the recent relevant/comparable renewals took place within the vicinity of your building/centre. This information would become point of market evidence.
Surrounding Demographic:
- It’s crucial to know what is happening surrounding your building/centre in the next three to five years before you renew for additional terms. Subject to the type of your business, sometimes an unknown futuristic plan may cause serious impact on your business – we are here to future-proof your business!
Relocation
Whether you’re considering moving down the road or across the country, there are a lot of factors to consider. Engaging a tenant representative can ensure you find the best location for your needs.
It Might Be Time For a Change
It might be time to relocate some or all of your business operations to a lower cost, better quality of life, business-friendly city or state.
- You Need to Know Where the Best Options Are
- High Cost Overhead Can Lead To Expensive Problems
- You Can’t Afford to Make a Mistake
Renewal Vs Relocation
As you approach the end of your commercial lease, you may wonder whether to renew or look for a new space. Both renewal and relocation have pros and cons, so you’ll want to consider both options before making a decision.
To get you started, we’ve compiled the benefits of renewing your lease and relocating.
Benefits of Lease Renewal
- Minimize interruptions to your business
- Avoid moving expenses
- Remain in a location easily found by clients
- Maintain relationships with your landlord, property manager and clients
- Reuse your existing build-out instead of paying for pricey tenant improvements at a new location
- Save time by renewing instead of researching, touring and negotiating for a new space.
- Generate excitement among your employees and access a new talent pool in a new location
- Build a new space that better fits your needs and includes opportunities for expansion
- Ensure your location is the best in the market with the latest features
- Negotiate a more favorable deal with a new landlord
- Enter new markets and expand your client base
Lease Negotiation
NEGOTIATE YOUR BEST DEAL
- Landlord’s will come to play for the right tenant. This means better terms and better deals. Having the right team on your side can be the difference between getting a deal done, and getting a great deal done.
- Your best interests are our only interest.
MAXIMIZE TENANCY VALUE
- Creating competition and leveraging market knowledge to remind your landlord the value of your tenancy
GET BETTER TERMS
- Being a desirable tenant gives you the opportunity of deciding which terms fit your needs.
ACHIEVE OPTIMAL SAVINGS
- Landlords will compete for your tenancy, offering you the best deal, at the right price.
NEGOTIATING CAN BE A NIGHTMARE
- Getting It Wrong Can Cost Millions
The devil is in the details. You need an expert on your side to make sure hidden “gotcha’s” aren’t missed. Typically:
- Leases Are Written in the Landlord’s Favor
- Negotiations Take Time
- You Might Not Get The Best Lease Terms
- You Could Be Leaving Money on the Table
- Landlords Have Expert Brokers On Their Side
