5 Reasons Your Landlord Doesn’t Think You Are Serious About Moving

by CoyDavidson on November 20, 2010

Do You Have a Compelling Reason to Move Your Office?

Earlier this week in my post titled “We are Looking for New Office Space“, I discussed the unusual approach of a Los Angeles based law firm sending out a formal press release announcing their search for new office space. I speculated that part of the motivation behind the press release could have been posturing with their current landlord in an attempt to create leverage in an upcoming renewal negotiation.

The reality is in most scenarios, Landlords feel they have a competitive advantage in renewing an existing tenant versus the Landlord that is trying to entice a tenant to relocate. This perception is to some degree accurate as tenants typically need some compelling reason to move.

Why the Landlord Does Not Think You Will Move

  1. They know on average tenant’s renew their office lease about 70% of the time.
  2. Your lease is about to expire and you just now started discussing renewal.
  3. They recognize the time, expense and effort involved with relocating.
  4. You are not in the marketplace conducting a credible market search.
  5. You have not hired a tenant representation professional to assist you in evaluating your options and represent your interests in lease negotiations.

In order to level the playing field in a renewal negotiation, the tenant needs to at the very least create the perception of the compelling reason to move.

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  • What happens if/when FAS 13 makes tenants forecast and disclose the likelihood that they will exercise their renewal options? Game changer???

  • CoyDavidson

    Chris, that is an interesting question to ponder. Off the top of my head I am wondering how they can forecast that business decision and more particularly the timing of it. Would it force companies to make renewal decisions further out from there lease expiration.

  • Bailey Webb

    In my past PR life, we worked with a service-provider client who had a big law firm client that did the same thing — put out a press release saying they’re kicking tires. They ended up renewing, but they did take less space and get some hefty concessions.

  • Frank Gunsberg

    Go no further than #5. Hiring an experienced broker who takes charge of the process is all you have to do. That person speaks the same language as the landlord, has the time and ability to get the job done and then if the Landlord plays hardball its bye-bye tenant. Landlord’s generally change their tune when a seasoned broker is doing the talking.

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