How to Have Success in a Post-COVID Market
It may seem far away, but a post-COVID world is something we are all looking forward to. While we are still in the thick of the pandemic, many companies have already begun to plan out what the return to their office space will look like. In Boston, there is currently over 2 million square feet of sublease space, and that number is sure to increase. As a result, tenants are provided with diverse options as they consider what their futures hold.
As companies look for guidance on how to take advantage of a softening market, there are a few things that can help lead to better outcomes. While some may seem basic, putting these ideas into practice is a key indicator of successful results:
Cast a Wide Net
Tenants who are willing to be flexible on location, asset type and term are going to have an extensive list of options. We are on the cusp of a period when sublease inventory is likely to offer bona fide relocation options to tenants at both discounted rates and shorter lease terms. These types of deals will offer not only an economic incentive to relocate, but also an added layer of flexibility that allows tenants to avoid committing to a location long-term. With so much in transition, it’s hard enough to predict what next week will look like, let alone three years from now. Leases that emphasize flexibility provide companies with the bandwidth to navigate the uncertain futures they're currently facing.
While it's been almost ten years, tenants are now finding themselves in a position of leverage with most landlords across the city. Though each situation is different, tenants should not be afraid to use this opportunity to push the envelope when negotiating with landlords. This should always be done thoughtfully, but as time continues to tick by there will be landlords in need of cash flow. As a result, they will end up reaching for deals that they otherwise may not have agreed to in the past.
Time is now on your side. Typical timelines would suggest a 10,000 square-foot tenant sign a lease to relocate anywhere from 8 to 12 months prior to their lease expiration. While this will always be impacted by the condition of the space to which you are moving, ample sublease inventory will provide the flexibility to move into spaces on shorter timelines. Plug-and-play opportunities are abundant in today’s market, and provide a point of leverage in all negotiations. In this market, it's important to let time work for you, not against you.
The above strategies will help provide tenants with strong real estate results. Having the right brokerage firm representing your interests is more vital now than ever. By partnering with a firm that solely advocates on behalf of tenants and isn’t under pressure to lease office space for any landlord clients, tenants have access to the best deals and opportunities. Please reach out to Cresa’s team to see how we can offer great results to you and your organization.