Just because your lease is in the middle of its term doesn`t mean you can`t renew it. You just need to find a reason that is in your landlord`s best interest to negotiate with you, even if it`s not technically necessary. Here are some situations in which this idea can be applied: If you accept this offer, please contact our office at [Enter date]. An extension of the commercial lease will also be a lengthy process. Starting early can help you make the best possible decision for the future of your business and have enough time for renegotiation. Don`t make the mistake of thinking that the renewal process will be quick and easy. Give yourself enough time for round-trip negotiations with the landlord to make sure you don`t have to sign a less-than-ideal contract in the event of a time crisis. As you can imagine, landlords receive financial benefits when they renew contracts with existing tenants. When a tenant leaves, the landlord suffers a loss of rent and incurs additional costs necessary to update or renovate and market the vacant space. The document being prepared must have a given official date to help both parties keep track of their new agreement. The two spaces available in the article “I.
The parties expect the month and calendar day, and then the double-digit year in which these documents will come into force, which will be created to be posted on both sides of paragraph “20”. Sale of building to come. Many landlords try to stabilize their rental roles before selling their properties. While they may not be willing to reduce your rent, they might be willing to let you lock in your rent for an extended period of time and you might be able to negotiate a few months of free or partially reduced rent in exchange for a renewal. Big new vacancy. When buildings have a big vacation, landlords often want to secure the rest of their rental list to make sure they don`t end up with completely vacant properties. Your negotiating position can be extremely strong if your lease includes a colocation or “go dark” clause that would otherwise allow you to leave the property. If you renew your lease earlier, you can have the satisfaction of having office space for the future. This can save you money if market prices go up, can lead you to get a larger tenant improvement allowance, and may even be the right solution for an expansion if you`ve planned one.
However, it`s not for everyone. Businesses that have higher than market rental prices, are growing at a rate their landlord can`t accommodate, or don`t see their current office as a long-term home shouldn`t consider renewing their lease sooner. At first, it can mean different things to different tenants. As a general rule, large tenants should start the renewal process earlier than small tenants. If you`re in a competitive real estate market that shows no signs of slowing down, it may be a good idea to renew your lease sooner and secure current rental rates, rather than future prices, which are likely to be much higher. When it comes time for a commercial lease extension, it may seem like a simple process. The decision to stay simplifies the process because you don`t need to visit the websites, and most importantly, if you have a renewal option, it`s usually easier to negotiate the price and terms. However, when you think about staying in your space in the same way as returning to your space, the importance of the process becomes clearer. By treating a commercial lease extension as if it were an entirely new lease, you can take full advantage of the freedom to change to potentially save money or improve your terms. Editor`s Note – The option may include an additional step or activity required to exercise the option, para. B example if, in a given year, the owner requests a substantial renovation of the leased premises as a condition of exercising the renewal option. If such an activity or step is required, it must be performed or properly handled in the form used to exercise the option.
Having helped hundreds of clients with their lease extensions, our team of AQUILA tenant representatives understands the value that can be achieved by going through the process early. We also know that early renewal is not the right decision for all businesses. The option generally describes the time of notification of the renewal, the amount of rent as part of the renewal or how it will be negotiated, the number of extensions allowed, the duration of each extension and, if applicable, the initial terms of the lease that will be excluded from the renewal. The knowledgeable tenant will consider negotiating an option for one or more consecutive extension periods when entering into a lease rather than accepting a single long-term lease. The tenant is not obliged to exercise the option and benefits from the additional flexibility. [See Form RPI 565] If the terms of the lease largely match the original, a simple 1-page lease can be signed by the parties. If the new lease involves many changes, i.e. a tenant has changed, the landlord has changed, the tenant has moved to a new unit in the building, etc., a new lease must be approved between the parties.
Just like initial lease negotiations, renewals are usually a lengthy process. You should consider the proposal you receive from the owner as a starting point for discussions and be prepared to counter it. Moving your business is a time-consuming and expensive process, so it makes sense to seriously consider renewing your existing lease for your current space. Take the time to research the current state of the commercial real estate market in your area. Renewals are usually faster transactions than signing new leases, but it`s still recommended to go through the market investigation process to better understand the trading points of an extension (and get the most leverage from your landlord). .