How to correctly renew your office lease?
Dernière mise à jour : 6 févr. 2021
Don’t renew your lease automatically
When your lease comes up for renewal is crucial to ensure you’re renewing based on a correct, competitive price that will allow your business to continue to function.
Even if your company stayed in the same location for many years, you should still negotiate your business lease each time it comes up for renewal, to ensure you get the best market conditions throughout the life of your lease.
Even if you signed an office lease for a defined time with an automatic option to renew, don’t automatically exercise the option, that would renew your contract under the same terms.
look at the state of your business,
review your requirement, to make sure you did not forget any elements that may influence your needs in the future,
review what you’re satisfied and dissatisfied with in your current lease,
look at current market conditions.
Then figure out whether it makes more sense to renew or negotiate a new lease altogether.
Value of the good tenant
In case you’ve had the same lease, with the same landlord for several years and have been a stellar tenant and
followed landlord’s rules,
paid rent consistently and on time,
kept disturbances in check, etc.
promote that fact as you negotiate.
Most landlords would rather keep a good tenant and get a little less rent/offer him additional benefits, than spend the time, money and effort to find a new tenant who may or may not be reliable.
While you’re doing research on rental conditions in other properties in your area, you should always check out availabilities within your own building. Landlords may offer also other incentives for new tenants, like months of free rent or certain improvement works to the space, which you will be able to take to the negotiating table for yourself, as well.
You’ll never know until you ask.
Even if you are signing a new lease and don’t have history with the given landlord, you still can negotiate based on your past behavior as a tenant. You can provide references and payment history from past landlords to try and reinforce your negotiation position.
Why negotiate ?
Like most business owners that rent their offices you will need to find the right location in a desirable size that corresponds to your budget. Negotiating your lease is crucial to ensure you’re getting a correct, competitive price that will allow your business to function and ultimately flourish.
For many companies the office rent represents the second largest spending after salaries. However, when it comes to renewing or negotiation of their lease most of the companies think the only thing to there is to discuss is the rent per sqm.
It’s wrong !
The lease holds many points which can be optimized & negotiated:
rent per sqm
rent free period
landlord's contribution towards tenant's fit-out
You negotiate your lease every 5-10 years. It makes sense to hire someone to represent your interest in these rare negotiations... or learn how to do it yourself.
The economies realized by you will surprise you.