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Leasing office space is a complex process, involving a significant financial commitment. Tenants should retain a trusted real estate adviser when searching for office space for lease to ensure that they avoid some common mistakes.
Tenants commonly start negotiations late in the process without alternative options. By doing so, they fail to create a competitive bidding environment, and needlessly waste money by forfeiting their negotiating leverage. Tenants should start the negotiation process early, and negotiate with multiple landlords concurrently to create a competitive bidding environment.
Often tenants assume that, since they will probably renew at their current location, there is no need to start the negotiation process early or to find alternative locations. These actions indicate to the current landlord that the tenant does seriously consider relocation. Landlords know that the managers of other buildings can take at least six to eight months to create a space plan, get construction pricing, agree on a rental rate, prepare a lease document and ready the space for occupancy. If the tenant begins the renewal negotiation with less than 6 months out from the expiration date, the tenant has less leverage in the negotiation.
The same principle applies to representation during a renewal. By not hiring a broker, the tenant signals to the landlord that it is not seriously considering alternatives to its current location. This signal reduces the negotiating leverage of the tenant and costs the tenant money. The key to a successful renewal negotiation is creating competition between your current landlord and surrounding landlords in the area, while maintaining a controlled and organized process.
Landlords hire professional leasing agents to negotiate the highest returns for the investment in their building. Likewise, tenants have the right to retain a real estate adviser to provide the proper market research and negotiating skill. A qualified tenant representation brokers will save significant amounts of time and money on lease renewals, while protecting the tenant’s relationship with the landlord.
At Golden Group Real Estate, we specialize in tenant representation real estate services for office space users in the Chicago area, helping local business owners find office space and negotiate lease and purchase agreements. We never represent landlords, so we are prepared to negotiate aggressively on behalf of our tenant clients.
For more on Golden Group Real Estate, read about our real estate services. Let us know if we can help you find office space for rent or buildings for sale. Call us at (630) 805-2463, email us at firstname.lastname@example.org, or enter your office space search criteria below.
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