What Are Your Options When Your Commercial Lease Expires During These Unprecedented Times?

Cresa Ottawa

May 2020

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:​

  1. 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

  2. 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.

  3. 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.

design mockup renewal.png
Considering a Renewal?

When faced with a lease expiration, a renewal is likely your first consideration. Preparing for smart, successful negotiations with your landlord requires a through understanding of several factors - the most important of which is timing. Ideally, formulating your renewal strategy begins 18 months prior to expiration.

Download the full report here for more information. 

Renewal vs. Relocation

Should we stay or should we go? Answering this deceptively simple question requires thinking beyond your workspace and existing lease terms. Instead, consider the current needs of your business and your vision for the future. What type of layout will optimize daily operations and your balance sheet? How can space contribute to employee retention and recruitment? 

Download the full report here for more information. 

Instead of a renewal, have you considered a Relocation?

Whether your organization is expanding, contracting or moving to a different city entirely, relocating an entire workforce can be overwhelming. Navigating site selection, negotiating lease terms, preparing employees for the transition and ensuring construction remains on time and within your anticipated budget requires vigilent planning, quality control and industry expertise.

Download the full report here for more information. 

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.

CONTACT
SOCIAL

E: ottawa@cresa.com

D: 613.688.7200

130 Slater Street, Suite 1000

Ottawa, ON K1P 6E2

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