There are many reasons why a company may have excess leased space and in turn, lost income. The ideal solution for this is to either sell that space or turn it into an income-producing space – and both are easier said than done. Fortunately, one of the many services that commercial real estate brokers provide for business customers is helping them eliminate lost income when it comes to surplus commercial space.
Surplus Real Estate Problems
In any uncertain economic times, a company may have to make an unforeseen change to stay profitable. That could mean changing a product line or offering more or fewer services. Other times, it may mean restructuring staff which can lead to paid space that is unused. It is even possible that a poor analysis of a company’s needs was done when a lease was signed. All of these things can leave a business with more space than they need, an area that is unfortunately reducing efficiency.
It is not easy for a company to remedy the problem of surplus leased space and regain some of that lost efficiency. The best way to deal with excess space is not to have any; however, if that is not the case, a disposition strategy is crucial under such unavoidable circumstances. So it is essential to work with skilled commercial real estate brokers who understand and can deal with such a dilemma.
Having a disposition strategy is an important part of the commercial leasing process, one that should be considered ahead of time before signing a lease. It provides necessary options for disposing of excess real estate and can help a company remain profitable in the event there is unused space.
One way a disposition strategy can help free a company of the burden of unwanted real estate is through negotiations with potential tenants for the space or with landlords on lease fees. A good strategy contains many ways in which a business can leverage itself with landlords and potential tenants in order to recover lost income.
Additionally, commercial real estate brokers and tenant representatives frequently leverage options such as relocation to a more suitable space to recuperate lost funds or obtaining better lease accommodations with existing landlords. This is especially useful when real estate lease values are lower and landlords do not want to lose an existing tenant.
Avoiding the Problem
Good planning is the best way for a company to avoid excess space. Current needs be addressed and various options planned for the projected future. Businesses must consider a “what if” scenario and include options in planning and lease negotiations if there is extra space. This is something that can be done with the help of a commercial real estate brokers or a skilled tenant rep, something that should be a part of every business plan since it is one way a company can keep operating expenses minimal.
A company that wants to find the right property to lease and help in resolving problems such as surplus space should work with reputable local commercial real estate brokers. A tenant representative can negotiate a great lease for their client and help them prepare for all possibilities concerning their leased space!
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