To Renew or Not to Renew, that is The Question...
Is it almost time to renew your office lease or are you facing required changes to your space? Well, it’s time to address that elephant standing in the corner of your office… Should you renew or relocate? Don’t you wish the answer was as simple as the question? There are many factors to be considered regarding your office layout, strategy and location. Furthermore, you will need to weigh those factors against a lease renewal or relocation. And, being that this is such a crucial decision for your business, you may want to hire an office strategy expert!
So, it’s time to ask yourself these questions prior to signing your renewal agreement:
1. Is your company expanding or is it time to downsize?
Or, you’re good with the space but want better terms?
If your answer is yes to any of these, it may be time to look at new space options and/or terms, whether within your current building or the surrounding markets. Simply renewing, while your business is downsizing, could leave you paying rent on square footage you are not utilizing. Conversely, remaining in a space that your business is already outgrowing will dramatically affect your productivity and potential to continue on your track of growth. Right-sizing your space is important to keeping your costs in line and to ensure you won’t be stuck in a less than desirable space. But even if the amount of space you have is sufficient, the market is constantly changing and it is always fruitful to evaluate today’s terms to make sure you’re in line and protected.
2. Are you inconvenienced by the building you’re in?
Similar to cars, buildings depreciate, and it’s not just what you see on the surface. If you are located in an older building, the electrical, HVAC and other systems may be outdated, and that could easily affect your future plans for a remodel or expansion as well as your bottom line. What about internet providers? In today’s world, your internet access is just as important, if not more, than the actual space you occupy. If you are in a space without access to the latest technology trends, you may fall behind your competitors (fyi, Cresa has a division which handles all data and telecom issues for tenants, give us a call and inquire about our C3 division). What about the basic building utilities; are the HVAC units constantly breaking down or are the elevators regularly out of service? This is something that is not only an inconvenience to your employees, but also your clientele… Keep in mind, as buildings depreciate the Landlord’s operating expenses increase and a good portion of those costs are passed on to the tenant. What about the layout; are you in a second-generation space that wasn’t originally laid out for your company (or no longer fits your desired layout)? Moving could give you the opportunity to completely customize your new space.
On the other side of things, your employees and clients already know your location so change can be disruptive. Your employees are comfortable navigating to and from work regularly and already know the commute/traffic expectations. Maybe you spent extensive tenant improvement dollars on your space already and don’t want to go through the hassle of starting over in a new location. This is where a qualified tenant representative can create leverage with your current landlord to secure terms and space that fits today’s needs.
3. Wouldn’t a move be difficult and/or expensive?
Moving may be daunting, but it could ultimately be beneficial to your bottom line. Moving and the downtime associated do cost money, and obviously need to be considered. But, hiring a professional company like Cresa, who will compare each component of the financial scenarios you’re considering may reveal that moving is less expensive than staying. We also streamline the relocation which will minimize downtime, so you can focus on your business and not the many details associated with a relocation.
The actual move doesn’t have to be hard, disruptive or expensive. Cresa has extensive experience in moving commercial entities, which should ease your worries and stress.
4. Can I get a good renewal deal representing myself?
What really dictates a “good” deal? The Landlord may tell you they’re offering a “good” deal but when you partner with a firm like Cresa to perform extensive due diligence, you find their terms considerably above the market. You will never know what a fair market deal is until you’ve done a thorough analysis of the market. We perform the intricate process that ultimately reveals the exact terms available to renew or relocate. The time it takes to figure out if space is available in the buildings you like, contacting landlords, determining how much space you actually need, assessing all the other details (parking, construction, operating expenses, etc.) can be efficiently performed by a qualified tenant representative, like Cresa, which allows you to focus on what you do best.
These are just a few of the questions that may come up when you are considering renewal vs relocation. Determining the best option for your business takes time and careful consideration. Hiring a Tenant Representative like Cresa not only ensures you’re receiving a fair market deal, but assures you are making the best choice for your business, both in the short and long term. Cresa specializes in lease negotiations and has the tools to help make your decision easier.