Remember The Clash Song - Should I Stay or Should I Go?
November 06, 2015
It was about office tenants.
- Year end is rapidly approaching, and the inevitable year-end planning process may serve as a reminder that a lease renewal is on the horizon.
- Occupancy rates have improved in most markets, so tenant negotiating power is less than it was just a few years ago. In fact, industry experts predict commercial occupancy rates will continue to improve through 2016.
However, here are some steps you can take to improve your position as you move toward negotiating a renewal.
1) Start off by researching the conditions in your market. If occupancy rates are high, tenants have less leverage. Knowledge is power, and by preparing ahead of time, you will know what you can reasonably expect in term of concessions.
2) Focus on becoming a model tenant. Your landlord will be wise to keep a good tenant rather than take chances with a new occupant. Even in a landlord-favorable market, keeping a tenant who pays on time, takes good care of the property and is easy to get along with has an advantage in negotiations.
3) Begin evaluating your options for renewal at from twelve to eighteen months in advance. By starting early, you have adequate time to explore alternatives, plan your approach and negotiate for best results.
4) Prepare a variety of scenarios, including moving to a new space if you and your current landlord can’t reach an agreement. By being prepared to walk away, you will increase your odds of reaching your goal.
As you begin to explore the options available for your next renewal, engaging an experienced tenant representative can pay big dividends. A tenant rep has resources about market conditions, concessions that landlords are currently offering and a wide range of tools to guide your decision-making process.
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