Why Now is the Time for a Closer Look at Your Real Estate Strategy
Many businesses are in the throes of re-evaluating their real estate needs as they weigh the cost of their space against the rapid rise of remote work culture. While many are opting to sublease, those that are choosing to maintain offices are looking for ways to take pressure off their balance sheets and ride out the downturn.
Strategies for the Current Market
Second quarter market data and early third quarter activity show signs that tenants will have increased leverage with options like short-term leases and free rent. So now is a critical time to review your lease (or leases) and ensure your real estate portfolio is optimized to weather the storm.
A forensic lease audit offers tenants the opportunity to identify errors and recover overcharges. Operating expense exclusions, incorrect accounting methodology, calendar vs. fiscal year taxes and incorrect sublandlord billings are examples of common errors that can have impact on a tenant’s business. The COVID-19 pandemic may also give tenants the opportunity to challenge common area maintenance (CAM) charges or improper gross-up calculations based on unoccupied offices.
For businesses with a multi-location real estate portfolio, lease administration and strategic planning services can help businesses visualize their full portfolio to ensure that critical dates aren’t missed in strategic planning, monthly rent schedules are planned properly and that landlords and occupiers are in compliance. These services not only take the stress off of in-house teams, they can uncover hidden costs.
Navigating with an Unbiased Advocate
Occupiers who hire tenant-only advisors benefit from certain strategic advantages in lease negotiations. Because these advisors are not bound by any obligations to a landlord, they are positioned to negotiate more aggressively. How? They keep your desired outcome completely confidential, offer unbiased opinions on your situation and can leverage competitive offers from multiple landlords. All of this gives the tenant maximum leverage in negotiations, resulting in a real estate strategy that better supports your business.
Nick Markel is currently supporting occupiers on lease advisory and workplace strategy services. Contact him for more information. For thought-starters on negotiation points as occupier leverage increases, download our guide.