How to Negotiate a Commercial Lease Renewal
When the time comes around for your office lease to be renewed, there is also the opportunity for negotiation with the landlord. As a business owner, it’s important to make sure you’re getting the most out of your deal. This is your chance to position yourself as a tenant who knows their stuff!
However, we understand that negotiations can be a delicate process than needs approaching with care. To help you out, we’ve taken a look at how to negotiate a commercial lease renewal to get the best outcome.
Get an understanding of the current market situation
The first step in negotiating is always having the knowledge to back up your proposals. There’s no use just throwing random numbers out based on what you remember from office rent prices a few years back. Instead, do your research and see how the current commercial real estate market is performing. Look at rival properties and understand the average rent for different areas of the city or town you are in.
If you’re based in London, make sure to check out our market rent guides.
You need to start thinking about negotiations long before the commercial lease end date. Otherwise, you’ll be caught on the back foot. Make sure to review your lease regularly throughout your time as a tenant, and you should also approach your landlord a few months before the renewal. The more time to secure a deal, the better. Plus, there may even be an opportunity to renegotiate your lease early!
Understand your value as a tenant
Often, tenants get overwhelmed by the thought that the landlord has the power to decide their rent and believe they are powerless in the situation. However, good tenants are incredibly valuable to commercial landlords. When a landlord renews a lease agreement with an existing tenant, they will gain financially. Alternatively, when a tenant leaves, the landlord may well have to put up with a loss in rent, not to mention additional costs relating to making renovations and marketing the office space.
Look at what needs to be updated in your office
The approach of a lease end date is the perfect time to think about what needs to be updated or improved in your office space. Are there additional amenities that you need? Do you think that your space could work better for your employees in terms of layout?
Often, a landlord will be willing to make changes to the office building if it means that they can keep you on as a tenant. With that in mind, you should note down some key needs so that you can refer to them during negotiations.
Consider alternatives before committing
The tips we’ve given so far have all assumed that you will definitely be staying in your current office. However, it’s definitely worth seeing what else is on the market, and the end of a lease is the ideal time to do that. Compare different offices in terms of prices and what they can offer your company.
Why not have a quick look at alternatives with a simple office search?
Use a professional
It’s definitely possible to prepare for lease negotiations without assistance, but we also understand that you will want to invest your time into growing your business. Therefore, why not use a professional team to manage lease negotiations on your behalf?
If you want to stay in your existing property, Making Moves can represent you in the lease renewal and rent review negotiations with your current landlord. We can also help you if you want to explore alternative office spaces! Simply drop us a message to see how we can help you.