Tenants, Get Ready to Flex Some Muscle!
Across the country, economic concerns are pushing most commercial real estate markets more and more into the tenants’ favor. What does this mean for you and how can you use the current state of affairs to save money or better your lease terms?
Real estate occupancy costs typically are a company’s second largest expense, following labor costs. Every five to ten years, you, as a tenant, have the opportunity to negotiate the best real estate deal possible and the terms of that agreement will impact your bottom line for years to come.
With the recent unhinging of the credit markets and with vacancy rates on the rise, landlords are looking to firm up the tenancy in their buildings. If you are a business owner, thinking about making a real estate change, or even staying where you are and renewing your lease, you are in the driver’s seat.
Now’s the time to start flexing some muscle and to see how far landlords will stretch for you!
Before you jump into a new lease or even a renewal, ask yourself some key questions.
What’s most important to you?
- Is it important to have a corner office right downtown with a view of the mountains? Or is it enough to have my own office space and space for each of my employees?
- Is it important to have ample free parking for clients and customers? How about covered parking, out of the winter snow or summer sun, for me and my staff?
- How long will I enjoy climbing the stairs and consider it daily exercise if I choose the 3rd floor space without an elevator?
- Who controls the thermostat in my space? Me, my neighbor, or worse, the landlord?
- Could I cut costs by doing my own janitorial service? Is it worth it?
- Will the train tracks or freeway right outside my window interfere with phonecalls and meetings?
When it’s time to negotiate, you’ll want to pick your battles; landlords are willing to make some concessions, but not give you the farm. You need to decide in advance which items on your list are “needs” and which are “wants”.
You also need to ask yourself, “Do I have someone to represent me and my interests as I navigate through the maze of lease terms and decisions?” Even in a market that seems to favor tenants, a good tenant rep is worth his weight in gold.
Often time companies feel they are held hostage by their real estate and are forced into making decisions that are dictated by their facilities, instead of creating occupancy solutions that support their business. Companies are growing, some are cutting back, some are “hoteling” (having a pool of “share-able” cubes for employees that rotate in and out of the office) and many are encouraging telecommuting from home, allowing the company to use their space more efficiently.
If your space no longer fits the requirements of your company, your landlord may be open to making adjustments. As an advocate for you, a tenant rep can create real estate solutions that support your business goals through a thorough discovery into how you run your business, specific market knowledge and his leasing expertise.
“If your lease is expiring any time in the next 18-24 months, or if your space no longer fits your needs just right, now is the time to address it.”
A strong tenant rep can help you evaluate your current space, sift through your “needs” vs “wants” and evaluate expected expansion and contraction needs to help determine your real estate requirements.
The market is on your side...The time for action is now. Take advantage...flex some muscle and make your real estate work for you.
If you have questions about your exact situation, we are happy to answer questions or help you find the right professional that can. Give us a call anytime @ (719) 634-9000.
866.799.8732 | 719.634.9000 (o) | 719.448.0500 (f)