Why You Need to Renew Your Lease Right Now – Even If You Have Years Left
Having the perfect office space with the right leasing terms is crucial to your company’s success. You need the right location, the right space — and the right lease.
Unfortunately the lease you signed a few years ago may not be the perfect lease for your business in the future. For the past several years the market has favored tenants. This is partly due to property owners having an abundance of available properties, making them more willing to negotiate favorable lease terms to attract tenants.
Currently, occupancy rates are rising, causing a market shift in favor of landlords. The result? Attractive and updated available properties are becoming scarce.
So what does this mean for you if you are still in the first few years of your lease? It means that the longer you wait to renew your lease, the more likely it is that your renewal will feature less than favorable economic terms and amenities.
You can take a chance and wait to address your lease when it expires, knowing the terms may not be in your favor. Or, you can take action now and negotiate the best possible lease — one that benefits both you and your landlord.
The Shifting Columbus Market
Let’s put some numbers behind the shifting commercial real estate market in Columbus. In 2013, the Central Ohio Commercial Information Exchange placed Columbus office vacancy at 16.9%. As of October 2015, that rate had fallen to 10.1%.
If you’re interested in high-end space, the numbers are even starker. Class A office space includes buildings with the best finishes and in the best overall condition. Class A vacancy rates in the most desirable areas of central Ohio have fallen into single digits.
This is great for the economy, bad for tenants. While businesses have fewer options, landlords hold the leverage. As the market grows, you and other tenants will have less and less leverage in negotiating your lease terms.
Renew Your Lease Now
The idea of early lease renegotiation rarely occurs to tenants. Many love the terms they negotiated years ago, and assume similar terms will be available when the lease expires. Yet, the current trajectory suggests that the market will further tighten in the coming months and years.
Take advantage of the current environment by renegotiating before the market tightens any more. Most landlords will expect to begin negotiations about six to 12 months ahead of a lease’s end — which serves as an urgency tool in negotiations.
By beginning early, you can reclaim leverage and negotiate a favorable lease extension. By hiring tenant representation, you can maximize your leverage, obtain the best possible terms and maintain a strong relationship with your landlord.
Don’t Negotiate On Your Own
When you hire a Tenant Representation firm like Capitol Equities, you get the experience and skills of an expert along with the power of a third-party relationship. Without straining the relationship between you and your landlord, Capitol Equities engages in tough-yet-professional negotiations that will lock in the best deal for you.
Capitol Equities is deeply experienced in renegotiating lease terms beyond just your monthly rental rate. We can find other areas of concession such as improved parking options and favorable rates, improvement dollars for freshening up your space, relocation and early termination options, to name just a few.
We use our experience to create the best leasing situation for you and your business both now and into the future.Give us a call and discover how we can help renegotiate your lease.