Cost Saving Strategies to Reduce Rental Expenses – Market conditions for commercial real estate are currently in a state of flux. While no one knows how severely Covid 19 will affect the market, two things are certain: rental rates will probably decrease, and vacancies will increase. Some tenants will undoubtedly downsize, move to less expensive space or permanently close their doors. All of this market uncertainty will cause landlords to work harder to retain creditworthy tenants. All of these circumstances make it an excellent time for any tenant considering either a renewal or a renegotiation of an existing lease.
What is a lease renegotiation?
A renegotiation of your lease terms and conditions can help you achieve more favorable terms now. A lease renegotiation can take place at any point in the lease cycle.
What are some of the benefits of renegotiating my lease?
- Reducing your contribution to a common area or triple net expenses.
- Reducing cost through rent reduction.
- Increase or decrease the size of your leased premises.
- The reduction or elimination of security deposits.
- Have your landlord contribute to or make capital/cosmetic improvements to your space.
What are some tips for renewing a lease?
- Begin the process at least 12 to 18 months prior to expiration.
- Gather market data about your building and your submarket.
- Create negotiating leverage by convincing your landlord you may move.
- Do not share your intentions with anyone.
- Do not negotiate without representation.
Why hire a commercial real estate broker?
- A commercial real estate broker is familiar with all aspects of the commercial real estate market including rents paid by other tenants in your building and submarket and concessions currently being offered such as free rent and tenant improvements
- When you are represented by a broker your landlord will perceive you as sophisticated and serious about moving elsewhere thereby creating negotiating leverage.
- Our commission is paid by the landlord and factored into the quoted rental rate. If you do not have your own broker, this portion of total commission fees will simply be paid to the landlord’s broker. Take advantage of this free service!
Call or email today to discuss your options.
Pam Pester, President