I met with a client this past week so we could form a strategy and begin the renewal process of their lease. Because of their size and certain issues that need to be addressed, we are beginning the process 18 months prior to their lease expiration. We are also looking at a serious need to relocate the space, so we need time in case this becomes a reality.
When should you begin your renewal of your office lease? For Miami office tenants smaller than 4,000 SF, I would recommend a year prior to the lease expiration. Larger Miami office tenants need a minimum of a year with 18 months to 24 months being optimal.
Why so long? If you signed a 3-year lease, you are probably barely feeling settled and here I am telling you to jump back into negotiations. The reason — your landlord’s greatest leverage is time. If you want to move to a new space or use that possibility as a negotiating tactic with your landlord, then you need plenty of time to do so. Site selection and lease negotiations can take a minimum of 2-3 months. For larger tenants, it can take 6-8 months due to the many levels of approvals needed for a large lease. A permitted build-out of office space can take between 6-9 months. Why so long to move a few walls and add a couple of electrical outlets? 4 weeks for permittable drawings, 4-8 weeks for the building permit, 20+ inspections during the actual construction — you get the picture.
Your landlord knows all of this, so if you say you are going to move and your lease is up in 30 days, your landlord probably will not blink in the face of your bluff. He knows that typically it takes 45 days just to process the order to move your phone and data lines. The closer your lease gets to its expiration, the better the odds favor your landlord that you will be renewing the lease. You may think, “I’ll just go month-to-month on my lease while I find another space.” That is not an option with most landlords. Florida law provides for them to charge you double rent if you linger past your lease expiration date with renewing. This is one of their biggest hammers to use on reluctant tenants.
Level that playing field by using a specialized real estate professional like me to secure you a fair lease transaction. Call me for a free lease analysis.