When it comes to commercial lease renewal, timing and preparation are key. Here are the top five questions to ask to ensure you get the best deal possible.

1. Can We Renew Early? Commercial lease renewal negotiations should ideally kick off at least 12 months before your lease term expires, especially for larger businesses. Starting early allows you to:

  • Evaluate the current market conditions.
  • Express a genuine interest in exploring other options.
  • Be prepared to decline an initial offer if necessary.

Negotiating early provides you with the flexibility to adapt to changing economic conditions and gives you ample time to secure the most favorable lease terms.

2. Are Tenant Improvement Funds Available? Assess your space’s condition and identify any necessary improvements, such as new paint or carpeting. Additionally, consider other tenant finish issues, including common area renovations or upgrades. It’s worth noting that landlords often offer improvement funds to attract new tenants. Make sure to inquire about the availability of such funds, as they can be a valuable benefit for you.

3. Does Our Rent Reflect Current Market Rates? Market conditions and rental rates can fluctuate over time. To ensure you’re not overpaying, do your due diligence:

  • Survey the current market rates in your existing sub-market.
  • Explore potential alternative sub-markets for relocation.
  • Gather information on rates, terms, tenant finish allowances, and any free rent incentives offered to new tenants in the market.

Use this data as leverage during negotiations to encourage your landlord to make a more competitive offer.

4. Can We Give Back Unneeded Space? Take a close look at your space requirements. Consider not only your present needs but also anticipate your space needs for the next three to five years. If you find that you have excess space under your current lease, discuss the possibility of returning it to the landlord in exchange for a reduced rate. This can lead to cost savings for your business.

5. Are There Plans for Future Building Changes? Understanding the landlord’s long-term plans for the building is crucial. Find out if they intend to renovate or sell the property, and inquire about the status of anchor tenants. Changes in the building’s environment and tenant composition could significantly impact your business in the future, potentially warranting consideration of relocation.

In conclusion, securing a favorable deal and ensuring long-term success for your business when renewing your commercial lease. Approach the process with a proactive mindset and a set of well-prepared questions. Early negotiation, leveraging improvement funds, staying informed about market rates, optimizing your space, and considering future building changes are the key factors that will help you achieve the best outcome for your business.