Renewing your lease is often the easiest route; are you approaching it correctly?
While some organizations can be more nimble than others, relocating your office can be a significant cost (both monetarily and time-consuming) and cause a major disruption to your business.
As a result of the market's latest volatility, we’ve helped a greater number of clients renew their existing leases than in recent memory. While many of their individual motives for renewing have been similar (ie. minimal disruption, quicker deals, aversion to change), there has been one common denominator:
a desperate Landlord - one facing increased vacancy in their building, slower demand for space, and maintaining a “do-anything-to-keep-a-tenant” attitude.
However when it comes to renewals, there are two types of deals you can get:
Being able to leverage credible alternatives is a key factor when it comes to achieving a fair market rent and a concession package of free rent, TI, special rights and terms, etc. The absence of this information typically leaves an informational asymmetry with the Landlord, who simply gets away with providing much less than what the tenant deserves.
Curiously, we often hear from shrewd business owners who accept deals that simply don’t reflect the market. Whether it’s inertia or simple distraction, Landlords are not compelled to extend the most competitive deal to captive tenants who show no legitimate interest in credible alternatives.
So if I had to leave Midtown tenants with one message this month it is this:
Become educated on the office market, explore your credible alternatives, and proactively explore different ways to achieve the best deal for your business needs.
Or, you can start by giving us a call and asking us to do it for you ;)
Until next month,
Principal Broker | Noah & Co.
P.S. Several interesting Twitter threads
For the rest of our March 2023 Newsletter, click here.