Renew or Relocate
The Advantages of Renewing
One of the most important considerations when considering the benefits of renewing your commercial lease is that your business may continue to function without disruptions. Choosing to renew your current lease also enhances your lease negotiation stance, giving you leverage that may result in lesser tenant improvement allowances but ultimately reduced monthly rent.
If the tenant decides to renew or expand the expiring lease, the landlord will almost certainly want to renegotiate the lease and try to persuade the renter to pay more rent. A tenant broker will perform a similar role as the new lease is being negotiated. The tenant representative will advise the renter of current market conditions to help them obtain the best terms.
Sometimes, a tenant's space requirements alter mid-lease, requiring them to negotiate an expansion or reduction with the landlord. In this case, a tenant rep broker will help the tenant choose the best option.
RENEWALS OF LEASES
When a tenant's lease term expires, they have three options:
Renew the lease on the current location.
Terminate the lease and look for another site.
At the existing property, you can expand or reduce.
The landlord usually requires the tenants to notify in advance if the tenant plans to renew or vacate the space.
A need to sublease space might emerge for a variety of reasons. The two most common examples are:
A company that is required to lease too much space wishes to sublease some of it. Such occurs when: a tenant purposefully leases more space than they could use and intends to sublet till they can expand into the space, a tenant downsizes their offices and no longer requires their entire space, or a tenant wants to leave its location before the lease expires, whether to downsize, expand, relocate or close the office.
Subleasing, or transferring an active lease to another tenant, is a fairly involved process that most tenants would prefer not to go through independently.
An expert tenant representative will know whether the tenant can sublease (some contracts do not), how to offer the space for sublease, and find a suitable sub-tenant.
The tenant representative will restart the site selection process if the tenant decides to vacate the space and look for another property.
Here are some benefits of relocation to a new space.
Increase employee enthusiasm and access to a new workforce and a fresh talent pool in a new area.
Design and build out a new location to more closely match your requirements and provide room for growth.
Equip your new location with the newest features to make sure your location is the best on the market.
Enter into a better lease agreement with a new landlord.
Obtain new clients and increase your market share.
In some scenarios, when you relocate your business from Manhattan to Brooklyn into strategically and conveniently located flex buildings, you can save tens of thousands of dollars each year in NYC Tax Credit Programs that are not available within Manhattan or other boroughs.
Every business has unique goals, and we would love to discuss with you your business goals and help you in choosing the best course of action for your business. When you are ready, please contact us to schedule a free, no-obligation consultation with a member of our tenant representation team.