Time to Renew? Or Relocate

In the current economic climate we are still seeing higher vacancy rates and lower rent rates than we have historically seen in the past decade.  This is giving tenants some unique opportunities to upgrade office space, increase their amount of space at the same price, or lock in long term lease deals at low rates.  On the flip side, landlords are fighting to keep quality tenants and attract new ones by offering low rent, tenant improvements, and free rent on the first years of multi-year lease deals.

Often landlords are reluctant to reduce the rent of a long term tenant, even if the market is down.  This provides an opportunity, as the tenant has a reason to look for new space and see what is available that might be nicer or in a better location than their current space.  It also provides an opportunity for some negotiation with the landlord if one is familiar with alternate locations in the marketplace.  Having a professional, such as a commercial real estate agent, renegotiate your lease for you, could get you the most for your money.  We are familiar with what other tenants are paying, what incentives are being offered and what is a fair renewal rate.  If your landlord doesn’t offer incentives, a professional can also help you find the best relocation possibilities.

Even if your lease is not coming due for 1-2 years, a tenant may be able to “blend & extend.”  This is when you sign a new lease (ie for 5-7 years) at a rate that is below what you are currently paying, in exchange for committing to staying longer.  This is often a win-win for everyone as the landlord knows they will not have vacancy and it may help with bank financing or notes the landlord has coming due over this time period.

Talk to a professional for the best negotiation strategy and keep your real estate dollars maximized!

-Dan Stiebel, CCIM

Dan Stiebel

Dan Stiebel

Associate Broker
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