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When the Market is Down You Have the Tenant's Advantage
Take Control
Is the real estate market really bleak?
That depends on your perspective. If you're thinking about renewing your lease, locking into a long-term lease, downsizing,
relocating, or renovating your space, one thing is clear: It's a tenant's market.
- Landlords today are anxious about holding onto their tenants, and they are more willing to give tenants added concessions.
- You can leverage your position during negotiations to secure better terms, including lower rent, free rent, and increased
improvement allowances.
During this period of economic uncertainty, you need to be opportunistic and limit risks. By partnering with an advisor that works for
you, not the landlord, you will maximize savings.
Realize Additional Cost Savings
To maximize your opportunities, you should first examine market conditions and make yourself visible in the market. Also,
determine your landlord's debt situation and promote your own credit standing.
- Early Lease Renewal. Even if your lease has two to three years remaining, early lease renewal may help you secure lower
rents, free rent, and greater contractual flexibility.
By renewing a 10,000 SF lease two years early with a $3/SF reduction on the remaining term, you can save $60,000!
- Subleasing. If you have a longer-term lease and are planning to downsize, this might be a good time to sublease part of
your space. Or you can try to restructure the terms of your contract.
- Workplace Strategy. By working with CresaPartners' Project Manager, you will learn how to do more with less. This includes
reconfiguring your space, updating your work stations, and arranging for more remote work time.
- Tenant Improvement (TI). Your TI allowance for construction and relocation costs offer further opportunities to save up to
20%. If you're not careful about finding hidden costs though, your allowance can erode quickly.
To arm you with effective tools during negotiations, Sean can prepare financial models coinciding with the strategies above.
Take Control
Is the real estate market really bleak?
That depends on your perspective. If you're thinking about renewing your lease, locking into a long-term lease, downsizing,
relocating, or renovating your space, one thing is clear: It's a tenant's market.
- Landlords today are anxious about holding onto their tenants, and they are more willing to give tenants added concessions.
- You can leverage your position during negotiations to secure better terms, including lower rent, free rent, and increased
improvement allowances.
During this period of economic uncertainty, you need to be opportunistic and limit risks. By partnering with an advisor that works for
you, not the landlord, you will maximize savings.
Realize Additional Cost Savings
To maximize your opportunities, you should first examine market conditions and make yourself visible in the market. Also,
determine your landlord's debt situation and promote your own credit standing.
- Early Lease Renewal. Even if your lease has two to three years remaining, early lease renewal may help you secure lower
rents, free rent, and greater contractual flexibility.
By renewing a 10,000 SF lease two years early with a $3/SF reduction on the remaining term, you can save $60,000!
- Subleasing. If you have a longer-term lease and are planning to downsize, this might be a good time to sublease part of
your space. Or you can try to restructure the terms of your contract.
- Workplace Strategy. By working with CresaPartners' Project Manager, you will learn how to do more with less. This includes
reconfiguring your space, updating your work stations, and arranging for more remote work time.
- Tenant Improvement (TI). Your TI allowance for construction and relocation costs offer further opportunities to save up to
20%. If you're not careful about finding hidden costs though, your allowance can erode quickly.
To arm you with effective tools during negotiations, Sean can prepare financial models coinciding with the strategies above.
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Sean Mangialardo 2010
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