The country was hit hard by an economic downturn in 2009 and the Dallas office lease market was certainly no exception. Many businesses were faced with cutting their expenses as much as possible. One of the major expenses where a company could save money was with their office space lease. Something that was discovered was that timely renegotiation was very important and could give advantages to both the lessee and the lesser. Although the economy has begun an upswing, what company cannot afford to learn from those lessons of how to best renegotiate a Dallas office lease?
Before beginning a lease renegotiation process, it is important to become educated on what to expect in a renegotiation process and set goals for what you want the outcome to be for your company. The following are important questions to consider before starting renegotiating your Dallas office lease.
What should be renegotiated?
For small businesses, relocation is not always a profitable way to save with a Dallas office lease. This is why it is important to know the goals of the renegotiation and the potential outcome it could bring to your company. Items that could have a positive impact from the renegotiation process could include: reducing the rent; expanding or reducing office space footage; extending or renewing lease terms; and, if it is really needed, terminating the lease.
When is the best time to renegotiate?
Your company should start thinking about the renegotiation process about 18 months ahead of the lease expiration if possible and 12 months ahead at the very least. With adequate time, you will be better able to research and gather more options to use as tools when you actually renegotiate the lease. On the other hand, in case the outcome of the renegotiation process results a move being necessitated, there is enough time to look for alternative Dallas office lease locations.
What is the most successful way to renegotiate a Dallas office lease?
There are things that you can do to affect a successful renegotiation process:
- Investigate the conditions of the local Dallas market. Local real estate market reports are very helpful in learning current lease rates and even vacancy rates in a specific locality that will suit the type of office space you will need. You can go online or buy a local business newspaper to help with this determination.
- Talk with your co-tenants. There are many landlords that hide information about vacant space of which other tenants may have knowledge. It is very helpful to get this information because when the vacancy rate is not what it appears; the occupancy rate is also hidden. Getting the true occupancy rate will help negotiate the lease you want to achieve.
- Determine the owner’s current financial condition. Remember, credit access for small businesses is still very limited and if the owner is trying to refinance the building’s mortgage, a higher occupancy rate for the building can be very helpful in this process. Your agreement to continue your Dallas office lease adds to the owner’s occupancy rate which can be very useful to an owner trying to succeed in refinancing.
- Absolutely everything is negotiable. Don’t just focus on your office lease agreement terms when considering the renegotiation process. There are many other things that could be looked at to reduce your office space rent such as: credit for build outs; maintenance terms; additional parking spaces; additional amenities and many more. Even if the dollar amount cannot change, these other items may be something you can ask from the owner to be included for the same rental rate.
Don’t wait for the lease to come to an end to think about the renewal. This has been the pitfall of many tenants who want to stay where they are and wind up agreeing to almost any terms in order to stay in the same Dallas office lease. If you don’t want to handle the renegotiations yourself, let a professional realty company complete the process for you. They know how to handle this and are better equipped to find the best Dallas office lease terms for your company.