What Are Your Options When Your Commercial Lease Expires During These Unprecedented Times?
Cresa is the world’s most trusted occupier-centric commercial real estate firm. We exclusively represent commercial tenants and solely focus on finding the best office space that drives superior results for your business.
Offices will always be needed. Home office is not enough in business.
Don’t let the current situation stop you from planning ahead! This pandemic will eventually come to an end, and things will get back to normal. There will be new trends shaping our workplace strategy, but offices will always be needed.
If your lease ends soon in 2020, don't delay:
Negotiation Penalties: when you do not have enough time to “walk away” from the negotiation table, you have less leverage to negotiate. This has several outcomes
Higher rental rate
Less tenant inducement allowance provided
Fewer options to create flexibility in your lease
Design, permits, and construction delays: Design, permitting, and construction delays are probably coming – and it takes time to get the stuff that needs to be ordered. Similarly, other needed components will experience longer lead times, such as IT infrastructure and furniture. This would create cost and operational issues if not addressed early.
Limited options: You cannot effectively negotiate when there is only one option. The passage of time will eventually mean that there is only one option…renewing in place.
If your lease ends after 12 months from now, there will be more opportunities for you to explore with increased vacancies:
Workplace strategies are quickly evolving to match new medical regulations, and companies are more willing to adopt a work-from-home model, leading to myriads of options on the market in the next few months.
Increased vacancies will definitely create opportunities for you. Whether you are renegotiating an existing lease, looking for new space or considering subleasing space, time is on your side. We recommend discussing these points of negotiation with your attorney and one of our advisors.
If you were thinking of moving to a new space or wondering how much space you need moving forward, we believe now is the perfect time to review your lease so you can explore options that best suits your future needs.