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Office Space Blog: Make Sure Time Is On Your Side When Negotiating Your Lease

Time is the tenant’s most important tool when negotiating a lease. The reason is simple. The more time a tenant has to negotiate, the more leverage he/she has with the landlord.

When evaluating renewing your existing lease versus relocating, waiting until the last minute will signal your landlord that you are in a tough position. He or she will have the upper hand in negotiation if renewing is, in fact, the goal. The same applies to a relocation. If the new landlord knows a tenant has to make a quick decision based on timing restrictions, that landlord will be less likely to give ground on lease rates, concessions or tenant improvement dollars, all of which directly impact a tenant’s bottom line.

So how do you make sure time is on your side? It starts with the research process. This involves taking an extensive look at the market to evaluate whether the tenant is better off relocating or renewing an existing lease. A lot of times, market rates will dictate renewal terms, but researching other options will also allow a tenant to see all other options available in the market during the evaluation process.

A tenant also needs to consider the timing of any construction necessary. If there is any buildout needed in a relocation, allowing enough time for the permitting/construction process to run its course is extremely important. Not allowing enough time for these items will delay lease commencement and could be very costly, with the potential to pay 150%-200% holdover rent while awaiting the buildout from your current location.

Don’t forget your IT services when planning (phone, data, Internet). Beginning early in the process and planning a relocation from an IT standpoint is very important. A tenant can have a great new space constructed and ready to move in, but if the phones and internet are delayed, this could majorly disrupt the business operations for an extended amount of time.

Finally, allow time for a legal review. Each negotiation is different. However, legal lease review can sometimes become a very lengthy process. When beginning a lease transaction, it is important to budget enough time in the beginning to accommodate legal lease review prior to lease execution.

The Stone Group

12912 Hill Country Blvd,

Building F, Ste. 201,

Austin, TX 78738

Phone. 512-732-8700

 

NAVIGATION

 


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