If you are leasing commercial office space, at some point you will have to think about whether you want to renew your commercial office lease or move offices.
Put simply, a commercial agent will help you to negotiate the best possible terms for your business during a lease renewal or office relocation. Commercial leases are complex and require in-depth market knowledge to negotiate the best lease terms.
Hiring a commercial agent creates leverage
Hiring a commercial real estate agent to act on your behalf throughout the negotiation process sends a message to your landlord that you are serious about getting the best deal possible.
Commercial agents are market experts
A good commercial agent will have intimate knowledge of the market, which is essential in getting you the best deal. The commercial property market is simply too vast and ever-changing for business owners to keep on top of.
Your landlord isn’t looking out for your best interests
Even if you think you have a good relationship with your landlord, it’s important to remember that they are not looking out for your best interests. Their priority is to maximise their own profits and they will likely use any advantage they have to do so.
Your landlord has a fundamentally oppositional goal when re-negotiating your office space lease.
Time and hassle
Lease renewals can be a time-consuming process, particularly if you end up needing to relocate offices. Hiring a commercial agent will take this burden off your hands and allow you to focus on running your business.
What do you need to consider when renewing your lease or deciding whether to stay or go?
Once you have a commercial agent on board and your lease expiry is coming up, you will need to weigh up whether your business should stay or go. This decision will be based on a number of considerations, including current market conditions, whether your office is fit for purpose now and for the future and the terms of your existing lease.
Let's explore some of these considerations:
Current market conditions
What has happened since you signed your last lease? The current commercial property market conditions could have a big impact on the terms of your renewal and market rent.
For example, if the market is tight, availability and stock of good quality space are low, and there is high demand for office space, your landlord may be in a stronger position to negotiate.
Is your office inside or outside the Landlord and Tenant Act 1985?
If your office is outside 'the Act', you do not have a statutory right to renew and you may not be able to stay in your current office space even if you wanted to. Find out more about the landlord and tenant act here.
Is your office fit for purpose now and for the future?
If your business has grown or changed, you may need more or different types of space. Does your current office space positively encourage productivity or collaboration? Does the location even work for the business anymore? Has the brand moved on and needs a fresh start somewhere new with a new look and feel? These are all important factors to consider.
The terms of your existing lease
If the terms are favourable, it may make sense to stay put. Your agent will be able to review the terms and advise you on your best options. Will there be tenant-friendly rent reviews and break clauses in the new lease? What length of term are you looking for on your new lease?
The cost of moving
Relocating can be expensive, so you need to factor this into your decision. Before you move into a new office, you should also be aware of any potential dilapidations that may be required when you leave your current premises. Dilapidations clauses can be found in most leases and require the tenant to return the space to the condition in which they found it.
Will your new office need to be fitted out and furnished? Do you need to factor in the cost of moving any existing furniture, or will you need to buy all new?
The disruption to your business
Moving offices can be disruptive to your business, so you need to weigh up the pros and cons. It's critical that downtime is kept to a minimum. Small office relocations may be able to take place over a weekend but for larger businesses, this can take much longer.
IT is a large consideration when relocating an office and should be looked after by experts.
Your budget and the cost of a new lease
How far has the market moved from your current rent? Are you being priced out of the area? Can you afford to stay in the current building on a new lease paying rent at a higher rate?
The Landlord
It's important to consider your relationship with the landlord and whether they are likely to be reasonable in negotiations. Just because you think you may have a good relationship with your current landlord, there may be plans for the building to be sold or refurbished and you must remember the landlord's wishes are very different to yours.
Making the final decision
After considering all of the above factors, you should have a good idea of whether staying or going is the right option for your business.
If you decide to stay and negotiate a commercial lease renewal, you will need to start talking to your landlord via your commercial agent sooner rather than later. Your agent will help guide you through this and ensure you get the best possible deal. Your agent will be responsible for:
1. Conducting market research to establish the current rental value of your property
2. Drafting a letter of offer outlining your proposed terms
3. Negotiating a commercial lease renewal with the landlord on your behalf
4. Drawing up the new commercial lease agreement
5. Liaising with solicitors to ensure the new lease is legally binding
If you decide to go, your agent will help you find the perfect new office space or commercial property for your business.
Either way, it’s important to have a commercial agent on your side who can advise you on the best course of action and help you to get the best possible deal.
Before your lease expires, (12 months out), we recommend talking to a commercial agent to start discussing timeframes and your options. The bigger the office space or commercial property you have or need, the longer the lease renewals or relocation process will take.
A new commercial lease is a big decision and it's important to get it right. We always recommend that tenants seek advice from a lawyer alongside their commercial agent to ensure the commercial and legal protections are adequate ahead of signing.
If you are considering renewing your lease or moving to a new office space, XIX can help you to understand the market and find the perfect option for your business.
%20(1).png)
-min.jpg)
