I was speaking with a client about his pending lease expiration. He has 13 months before the expiration date and felt there was plenty of time to address the project once the summer comes. He is a major tenant in the building and by his rationale there was no reason to expect that the landlord wouldn’t just roll over. He fully expects the landlord will offer aggressive terms right out of the box.
I get it. Inertia is powerful and relocating an office can be painful. But getting out in front of the process tips the scales in favor of the tenant. Here are three things to think about in advance of your lease expiration:
1. Negotiations take time. Even if the parties are negotiating amicably, people get distracted, there are holidays, people go on vacation, and there is always another crisis. Waiting until the last minute just creates another crisis.
2. You need time to create leverage and negotiate the best deal terms. This means working through the process of evaluating alternative buildings, creating plans for those options, and creating an active bidding environment.
3. Landlords have a good handle on the real estate process. The above timeline outlines the sheer number of items that need to be addressed during relocation. Landlords understand this better than tenants and use this to their advantage during negotiations. The closer the tenant gets to the expiration date, the less likely they are to move.