Let's Talk: What Does It Mean When Your Office Building Is "Under Contract to Sell"?

Let's Talk: What Happens When Your Company's Office Building is Under Contract to Sell?

If your company's office space is in a building that’s under contract to sell, it means the property is in the process of being transferred to a new owner. It’s essential to understand how this change could impact your company's lease and future occupancy. Partnering with a tenant-focused advisor like Cresa can help you navigate potential challenges, ensuring your interests are protected throughout the transition.

What Does This Mean for Your Lease?

When a building is sold, existing leases typically remain in place. However, a new purchaser will likely want an estoppel certificate reviewed and approved by you, the tenant, to confirm the lease in place.  It’s imperative to have this reviewed by a real estate expert to confirm it aligns with your lease terms, paying special attention to economic terms and special clauses such as termination, expansion, contraction and renewal/extension options. 

Additionally, a new landlord may bring changes, such as new management, policy updates, or even redevelopment plans that could affect your office space. It’s always a good idea to use a real estate expert to understand the plans of the purchaser and review your lease agreement to fully understand your rights and obligations.

Potential Changes to Watch For

1. New Management: A change in ownership often means a new property management team. This could lead to updates in building policies, maintenance procedures, or even communication styles.
   
   
2. Lease Adjustments: While your current lease likely remains valid, a new owner may have a different approach to lease negotiations. They might seek adjustments in rental rates, introduce new lease terms, or offer renewal incentives to align with their investment goals. Keeping an eye on office price per square foot trends in your area—whether you’re in the Central Business District, East End, or Foggy Bottom—can help you prepare for potential rent adjustments.
   
   
3. Redevelopment or Repurposing: Some buyers purchase office buildings with plans for redevelopment. If your new landlord intends to convert the property into something else, it’s crucial to understand your options and timeline.

How a Tenant Advisor like Cresa Can Help

Navigating these changes alone can be challenging, which is why working with a tenant-focused advisor like Cresa is so valuable. We advocate for tenants—not landlords—ensuring that your business interests remain a priority. Whether you need assistance reviewing your lease, negotiating terms, or exploring alternative office space for lease or purchase, we’re here to help.

If your office rental is in a building that’s changing hands, don’t wait to take action. Contact Cresa today to ensure your rented office space continues to meet your needs, no matter what changes come your way.