Start Early: Plan, Evaluate and Execute
Leasing office space can be a complex and time intensive process. One of the most common mistakes I see office tenants make is to begin the evaluation of their space requirements and market options to close to the date of their lease expiration.
Whether you decide to renew your lease or relocate it is important to allow sufficient time to ascertain your current situation, review your options, assess the marketplace context and negotiate with prospective landlords to ensure you optimize the end result.
Once a decision has been made, the period required to execute the lease negotiation and relocation process can range from three to six months at minimum and even longer if a major office build-out is involved. Depending on the size of your organization and current market conditions, you should prepare to begin the process 18-24 months prior to your lease expiration. It may take two years or more to complete the lease and relocation process for larger organizations. The larger your company the more lead time required.
What If I have no plans to relocate?
The ability to execute a renewal transaction in a shorter time frame is certainly feasible. However, this decision should not be made without a thorough assessment of your projected office space needs and options in the marketplace. More importantly from a negotiation perspective your existing Landlord recognizes all that is involved to complete the office relocation. Starting the process to close to the expiration of your lease only sends the message that you are not that serious about relocation.
On average office tenants renew their lease approximately 70% of the time and Landlord’s recognize the time, expense and the disruption to your business associated with an office relocation. In order to successfully negotiate the best renewal terms you have to create an environment where your existing Landlord perceives they are competing on a level playing field with competitive buildings that are vying for your tenancy. From the Landlord’s perspective, the more time to you have to orchestrate a relocation translates into less disruption to your core business. Generally speaking the more time you have to negotiate, the better leasing terms you will attain and renewing your lease a “little early” allows you to resume focus on other important business operations.